Milton Friedman (1912-2006), a noble price laureate in economic, an American economist, an advocate of monetarism. His famous theory against the Keynesian, that the government should focusing on monetary policy rather than fiscal policy to archive equilibrium and stability of economy. He critic the government should not react instantaneously to market condition. The Keynesian system does not consider of the lag time and ripple effect of government stimulate packages. Simply providing cheap credit by lowering the interest rate or printing money, is an unhealthy manner toward the economy in long term. As the old saying, "someone has to pay the bill, soon or later", the Keynesian system simply pushing the economy problem to the future rather than solving it. The money we printed today is future bill, which mean the future generation need to pay it off. This will cause a dramatic ripple effect to future economy - the perfect storm of economy collapse. Instead of react instantaneously according to spot market condition, a well-programed monetary policy should be adopted. Money should be injected to the market by pre-plan program at pre-designated rate regardless the condition of the market. This will able to:
- Provide adequate additional currency to market to continue growth at adequate rate without having risk of hyperinflation.
- Avoid excessive speculation and bubble to economy
- Provide additional fund to stimulate the market appropriately without severe depression during economy downturn.
- To counter the lagging effect of private business could not borrow as fast as the new currency is injected to the market.
Yet, the monetarism theory does not fully adopted in new economy. The controversy - "to err is human, but to really screw things up, its take a computer!"
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