Why can’t the government print more money to tackle the Covid-19 crisis?

The economy is suffering ‘unprecedented collapse’ due to Covid-19 and most often question asked during this time is why the government can’t print more money to tackle this crisis. Before diving into that question let us equip ourselves with a few basic jargons of the economy and who controls our money?

In simple words, money is a medium of exchange or a store of value.  Where does it even come from in the first place? Let me clarify one thing, it does not come from the government!
From 1935 the Reserve Bank of India controls the issue and supply of the Indian Rupee. Initially,  the RBI had to keep an equivalent amount of gold for the currency created but now currencies are printed based on the country’s  GDP(Gross Domestic Product). As of 2019, India’s GDP is $3.202 trillion which means a total of $3.202 trillion value of everything produced within Indian borders.

What if the RBI prints more money than India’s GDP? If they do so then the country’s economy will suffer from Inflation. Inflation is a decrease in the value of money with time i.e. the same amount of money will buy you less stuff than it used a year ago. At times country creates inflation to stimulate the economy and give a push but excess will create a problem.

Let me explain to you why! Inflation is analogous to a drug, it does stimulate at first giving a boost to the economy by creating goods and services. One needs a high dosage of a drug to attain the same stimulus that leads to intake of a higher dosage to go to a higher state. Finally, when one decides to stop using the drug, it creates withdrawal pains. To support my point, I will give you an example consider a small economy where there are four professions namely soldier, restaurant owner, tailor, and builder. Government prints extra money to boost the economy, a small dosage of a drug to stimulate. That extra money is used to increase the salary of soldiers and who in turn spend it on building their houses. Builder is overwhelmed to see an increase in the demand, he puts in more man-hours and increases building costs. The builder wants to spend his money to buy clothes but finds out that the soldiers have already created a demand for clothes and the price of clothes is increased. Tailor after earning more money wants to eat in a restaurant and realizes prices have increased in the food menu in no time. There is a deadlock situation created and a decrease in the value of money.

Hence, if a country prints more currency during difficult times like this then it will suffer from hyperinflation. The only way left for the government is to increase the GDP which means create goods and services. This will leave us with the only option which is to start going to work and paying wages to the laborers who work for us. The country’s economy is stable only when you spend your money!

Are you contributing to a greener and healthier Environment as an Electronic consumer?

Are you throwing away your functioning electronic devices into the trash, replacing it with a new device with added features? Hold on with that thought and let’s look at its destiny.

According to the United Nations E-waste Coalition, e-waste comprises of electronic or electrical components which have reached their end of life or even sometimes perfectly reusable components. Let’s consider the best case where the device is disposed of following the valid protocol and goes to a recycling factory. A deeper look at the device tells us that it’s made up of more than 1000 different substances with 60 different elements from the periodic table of which 18 are recoverable. Only 20% of it is dealt with and processed while the rest is unattended. The elements that are extracted back include gold(7% of the world’s gold is held into these), silver, indium and palladium.

The big picture is that the world generated 50 million tons of e-waste in 2018, which comes to approximately 6 kilograms per person. To put things into perspective, if all the e-waste was stocked up in a single nation it would be of the size of Kenya! This is comparable to 125,000 jumbo jets, more than all the commercial aircraft ever created. Although E-waste represents only 2% of solid waste streams, it is 70% of the hazardous waste that ends up in landfills. The UN University (UNU) predicts that this could nearly triple to 120 million tons by 2050.

 Seelampur is the largest e-waste dismantling market in India. Each day, truckloads of e-waste are dumped for thousands of kabadiwalas or raddiwalas to extract reusable components. The process involves acid burning and open incineration with toxic gases being the byproducts of the process, having severe health and environmental consequences.

This issue needs to be addressed by us unless we have plans to escape to Mars in the near future. This calls for the need to build a sustainable, circular economy where the value of the components and materials is kept constant. The wastes from one industrial sector could be used as raw materials for another if carefully done. This will yield readily available raw materials and has the possibility to create sustainable jobs. This benefits manufacturers and also consumers as this could reduce the costs for consumers by 7% by 2030 improving working conditions for laborers at the same time. For every 10,000 tons of computer waste processed, reusing or recycling can create 296 more jobs per year compared to the status quo which is of disposal in landfills or by incineration.

Now, what is your role in this? We as consumers need to be collectively aware of the consequences of our actions which contribute to climate change. If you are buying a new device, think twice whether you really need this? Re-purpose and re-evaluate. Store data online that reduces your carbon footprint. Buy energy star rated electronics so that they not only save electricity but usually last longer. The least that one could do is to Spread the Word! I hope this knowledge and awareness encourages us to become more responsible human beings.

Are you doing your part?

One Step Closer

SpaceX’s demo-2 launch scheduled on 31st May 12.52 am IST will make it the first private company to conduct operational crew missions. The success of this rocket launch will usher in a new era of space upon us. NASA relied on Russian rockets for sending astronauts and cargo into orbit. It is also a historic launch as it’s the first crewed launch from U.S in nearly a decade. The SpaceX mission is to create human settlements on Mars and these orders will fuel that mission. With NASA having no intention of interplanetary travel, this will put them on the map as one of few organizations that want to make human beings a multi-planetary species.

After several years of research and development, SpaceX finally made reusable rocket. The Falcon 9 on its first successful landing opened many opportunities for SpaceX to grow. The Falcon 9 booster has performed various cargo missions for the International Space Station (ISS) and has also successfully launched over 422 Starlink satellites into orbit. This experience and performance have given SpaceX and NASA the encouragement and confidence needed to perform the demo to launch where they will be sending Robert bahan Ken and Douglas Hurley on board to the ISS. The very Falcon 9 booster that is being used for this mission has been flown for 51 times and is hence a very reliable piece of machinery. This advantage of reusability of boosters is one of the primary reasons SpaceX can get orders from NASA with zero competition.

Elon thought Mars exploration was next logical step for humanity.  He realized profitable business can be built by selling cheaper rockets and fund for his MARS mission. He needed an outstanding team to make this dream come true. SpaceX used unconventional method of hiring young achievers giving them a purpose and fresh air to breathe.

We are lucky to witness space becoming Affordable! Who knows one day space tourism becomes a thing?