Winter is Coming: A Tale of Two Futures – Entrepreneurial State or Creative Destruction?
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COVID-19, economic growth, entrepreneurship, fiscal expansion, free markets, great recession, unconventional monetary policies
Abstract
This paper aims to explore the fundamental principles of sound monetary policy, fiscal prudence, and entrepreneurial innovation, which have historically supported the economic prosperity of nations. It seeks to identify the factors leading to an impending financial crisis and proposes countermeasures based on market liberalization and individual entrepreneurial resilience. Using a critical analysis of prevailing economic conditions, this paper evaluates the unchecked expansion of the monetary supply, fiscal policies, and government interventions. The methodology includes a review of historical economic trends and the application of theoretical frameworks concerning monetary policy, fiscal responsibility, and market innovation. The research identifies that the unchecked expansion of the monetary supply has contributed to inflationary pressures, diminished savings incentives, and led to the misallocation of capital. In addition, fiscal looseness and increased government intervention have exacerbated these economic vulnerabilities, creating conditions ripe for an economic crisis of substantial magnitude, possibly surpassing previous crises such as the Great Recession and the COVID-19 pandemic. The paper concludes that this impending crisis is not an unforeseeable "black swan" event but rather one with clear warning signs that require immediate action. The findings advocate for a departure from interventionist policies and emphasize the importance of returning to foundational economic principles, including market liberalization and fostering individual creativity and entrepreneurial innovation. This paper serves as a timely call for policymakers to address these challenges before the full impact of the crisis is realized.
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