This article was originally published at morganist economics. Copyright (C) 2020 Peter Morgan. https://morganisteconomics.blogspot.com/2020/03/corona-virus-economic-contingency-plan.html I did a lot of ground work before the Corona Virus hit to increase economic growth and provide an emergency plan for the economy, anyway you can read the outline of it below. Before you say it I didn't know that the virus would hit although I thought that it would be possible for a virus to occur and the economy was declining so I had to provide the work anyway. Does this reassure you? Corona Virus Economic Contingency Plan. I have my concerns about the state of the economy if the Corona Virus continues to spread at the rate it is currently dispersing. My first concern is the ability of the workforce to handle the impact of sick leave. If too many people become infected even if they fully recover the time they will take off from their work will reduce business output and effect the overall economy. I believe this can be overcome by providing an incentive for support staff to fill in for the lost work time the Corona Virus infected staff would generate, further tax exemptions may help. Compensating for lost work and getting money to support workers. I have developed a new taxation system for further work the 'Rising Personal Allowance for Income on Dual occupation' or the 'R-PAID' for short, which provides an extension to the primary personal taxation allowance for every pound earned from a second occupation. This incentive should encourage the workforce to take up further work and compensate for the lost labour created by the time taken off by the sufferers of Corona Virus. This in turn will help to support the overall economy and stimulate growth avoiding the consequences of a recession. Sustaining economic growth and avoiding recession. I have developed a technique that reduces the annual amount paid into pension schemes to push money into the economy. I call this method of economic stimulation 'Pension Pumping', when the annual pension saving allowance is reduced for the present year to enable a higher rate of consumption, this was applied successful before when dealing with deflation. There are also Treasury cost efficiencies made by deferring the taxation relief the pension saving receives as a result of the government having to borrow less money and pay less debt interest. Extreme emergency planning. I have developed an emergency plan for the preparation of a catastrophic event to make sure that funds are available to deal with the devastation caused. The first requirement is to make sure funds are available for emergency and support staff, the second requirement is stabilising the financial markets to maintain wealth and prevent defaults and the third requirement is to sustain economic growth. It is possible to freeze pension saving for a short period such as one year to support consumption and reduce the governments costs, it could raise £40bn per year. I would like to avoid pension freezing, although it could easily be compensated for in later years of pension saving. As long as workers in the final couple of years of their productive life can still contribute into their pensions and receive tax relief there would be little long term consequence. Younger workers can compensate for the lost contributions or lost pension tax relief in later years of pension saving. Remember this is only in a real emergency and I have only made this suggestion to provide an alternative option if there is no other choice. I think an emergency Quantitative Easing programme might be more appropriate, although it could undermine the currency value and lead to high inflation. If the programme was only for a small amount such as a couple of billion pounds per year it should not be too damaging, however for a larger amount of tens of billions of pounds per year pension freezing might be the better option. If the government was to freeze pension saving or even just pension tax relief payments it could only be for a short period or it would damage overall pension saving. Communication with the government. I have communicated these macroeconomic techniques with the Prime Minister the Rt Hon Boris Johnson MP previously to support economic growth, they might however become more important immediately if the Corona Virus escalates into a larger emergency. A letter putting forward the concept of 'Pension Pumping' was submitted to the Prime Minister, on Monday 10th February 2020, it also recommended optimising pension saving by reducing the annual pension saving allowance to £30,143 per year to stimulate the economy and make savings. I also submitted a letter to the Chancellor of the Exchequer the Rt Hon Rishi Sunak MP, on Monday 17th February 2020, in which I put forward the concept of the 'R-PAID' to stimulate economic growth and encourage a secondary occupation part time workforce. The letter was accompanied with a previous letter sent to the Prime Minister recommending an extension of £2,500 to the existing personal taxation allowance of £12,500 for workers in dual occupation. Any income from the second occupation would receive a tax exemption for a further £2,500. I sent a letter to the Prime Minister, on Tuesday 30th July 2019, that put forward economic growth techniques. I enclosed a copy of the book 'Economic Growth In a Highly Constrained Environment', which has an article within it entitled 'Pension - Annual Contribution Freeze'. The article explains the process and possibility of freezing pension saving if extreme events occur. The suggestion is made to support the economy to avoid a recession and prevent private wealth defaults, through increasing spending by prohibiting annual pension saving.
It is doing this kind of thing that takes up a lot of my time. I have to provide new and alternative policy options for governments in economic difficulty. You can view my work at morganist economics for free, there is also a book portfolio so I have provided the means for you to get the information you need. I have done my part as an economist.