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"Drain the water directly?"

Wang Shan frowned and pointed out the consequences of directly releasing water: "If water is released without the "Infrastructure Plan", the Dragon Country Currency will likely depreciate significantly, and the economic situation will likely turn from deflation to inflation."

"It's not a probability. If we just distribute money directly, we can basically confirm that there will be a significant inflation."

Qin Long said in a deep voice.

Perhaps many people do not understand what economic deflation and inflation are.

Economic deflation does not mean that the total amount of money has decreased, but that there is less money circulating in society and more deposits in banks.

To determine whether the economy is in deflation or inflation, you only need to pay attention to the M2 monetary data released by the National Bureau of Statistics.

What is M2 money?

M2 money is also called broad money, which includes M0 cash money, M1 narrow money, time deposits and market funds, and is the sum of the domestic money supply in Longguo.

M0 cash currency refers to cash in circulation.

M1 narrow money is MO cash money plus demand deposits of enterprises and units.

If the economy is in deflation, the amount of M0 cash money and M1 narrow money will decrease, while the amount of M2 broad money will increase.

Since a large amount of M0 and M1 currency has entered banks and become M2 currency, generally speaking, in order to cope with economic deflation, the country will choose to frequently cut interest rates.

1. It can reduce deposit interest.

The second is to force money out and stimulate the economy.

Compared with economic deflation, the situation of economic inflation is exactly the opposite.

Economic inflation is caused by too much M0 and M1 currency. In simple terms, there is too much money in the market, and productivity cannot keep up with the speed of printing money, resulting in money becoming worthless.

The best way to recover money in the market is to raise interest rates.

Raising interest rates can turn M0 and M1 currencies into M2 currencies, reducing the amount of money circulating in the market and exchanging time for space.

Whether it is economic deflation or economic inflation, the people at the bottom of society will be the most seriously hurt.

Because economic deflation will make people unable to make money, while economic inflation will make the money in their hands worthless.

If economic deflation switches to economic inflation during extreme times, many low-income people will go bankrupt in an instant, which is something that neither Wang Shan nor Qin Long want to see.

"You may have misunderstood. I am not suggesting that the country should directly transfer money to people's bank cards like Europe and the United States do. Instead, I suggest that the country should invest funds to improve the pension and medical insurance systems, and even education if possible."

Seeing the worry on their faces, Chen Xing expressed his inner thoughts.

Why does the economy experience deflation?

Why are people unwilling to spend money?

One is the world economic situation. The US dollar interest rate hike has caused liquidity to return to the United States, making money more difficult to earn.

Second, people need to save to guard against possible risks in the future.

For example, medical care and education are topics that every family cannot avoid.

Perhaps many people think that since the implementation of nine-year compulsory education, education expenses will not cost much. In fact, education is even more expensive than medical care.

A better kindergarten will cost tens of thousands of yuan per semester, and a worse one starts at two thousand yuan.

In addition to kindergarten, there are also cram schools and interest classes. If you choose the art route, it is not surprising to spend tens of thousands a year.

When you go to university, in addition to tuition, you also have to pay for living expenses.

If you fail the entrance exam, you will have to attend a private college, and the tuition alone will be between 10,000 and 30,000 yuan!
Many students go to college by actually using government loans.

It is precisely because of the need to take precautions in advance and to deal with possible future needs for spending money that people are forced to deposit large amounts of money.

"Makes sense."

Wang Shan's eyes suddenly lit up.

Qin Long applauded and analyzed: "Injecting water into the security system can not only save money for the people fundamentally, but also stimulate consumption to a certain extent."

"Yes."

Zhang Zhongchun echoed and continued, "Expenditures on education and medical care have been reduced, pensions have increased, and people are more willing to spend their spare money."

"I agree."

"It's not possible to release water directly, but it's still possible to release water indirectly."

Yin Songyang and Hao Zidong both expressed their opinions.

Although they are not academicians of economics, they are highly educated people after all and have a certain understanding of the underlying logic of society.

In the past, releasing water to cooperate with infrastructure construction was actually an indirect release of water.

Once the Infrastructure Plan is launched, money can naturally flow through workers and be mapped to various industries.

Why can we only release money indirectly and not directly give it out like Switzerland and Norway do?
1. The country was founded relatively late.

2. The population is large.

If the population of Longguo were to drop sharply to the level of Switzerland and Norway, not to mention education, medical care and pensions, everyone would even be able to own their own private jet.

But the reality is, with a population of 13 billion, even if each person only receives 100 yuan, the total amount of money released will reach 1300 billion yuan. Even if 1.3 trillion yuan of water is released, each person will only get 1000 yuan.

Therefore, money can only be distributed indirectly and specifically, and then the relevant groups will drive the operation of the entire social economy.

"but…"

Suddenly, Wang Shan thought of something, looked at Chen Xing and said, "According to the current national financial level, should we focus on medical care or education first, or pensions?"

He recognized Chen Xing's judgment on the economy and his way of thinking, and he was eager to know Chen Xing's thoughts.

Faced with the question, Chen Xing thought for a few seconds and gave an answer: "I think it is medical treatment."

"why?"

Wang Shan asked.

He thought Chen Xing would talk about education.

In any developed country, education always comes first.

You know, even the United States retained the education industry when formulating global trade.

For example, the Jewish people attach great importance to education. They will ensure that their offspring receive a good education even if it means selling everything they have, because history has proven that education is always the best way to broaden one's horizons and perspectives.

Chen Xing did not hesitate and expressed his opinion: "Let's talk about pensions first. If they are retired employees, they are unlikely to be short of money. The current pension amount is very high."

"For farmers, an increase of 100 or 200 yuan is not very meaningful, because they are most likely reluctant to spend it and will only save it for their descendants, so it cannot change the current situation."

"The same goes for education." After taking a breath, Chen Xing continued, "Currently, the biggest expenses for education are kindergartens, cram schools, and universities."

"We have to accept the fact that kindergartens and cram schools are for well-off families. Only some poor families who value education will send their children to kindergartens and cram schools."

"Since we are determined to change economic deflation and adopt a fiscal stimulus plan, without launching the Infrastructure Plan, only the medical field can absorb this huge flood and reflect it to every citizen."

After he finished speaking, he added: "After all, life is a hundred years long. Who won't get sick? Who can guarantee that they won't get sick?"

Chen Xing's heartfelt and powerful words made Wang Shan, Qin Long, Zhang Zhongchun and others stunned.

They didn't expect that a private enterprise boss would think so far.

What is a people’s entrepreneur?
This is the people’s entrepreneur!
Wang Shan fell silent at this moment. He was analyzing what Chen Xing said word by word and judging its feasibility.

After a full thirty seconds of silence, he already had the answer.

Just as Chen Xing said, since the decision has been made to release a large amount of money, this huge flood must be reflected on everyone.

Wang Shan also did not forget that Longguo is a country with the working class and peasant class as the main body.

According to the population census and statistics from the National Bureau of Statistics, as of 2016, there were 3 to 4 million farmers in China.

These 3 to 4 million farmers still rely on farming to make a living and have very limited spare money. The only area that can maximize their profits is medical care.

Compared with education and pensions, solving the problem of "medical care" can obviously reduce the burden more.

After all, who doesn’t get sick sometimes in life?
Once universal free medical care is achieved, 3 to 4 million farmers will be the direct beneficiaries and will no longer have to worry about not having money to treat illnesses.

"I, Wang Shan, will keep this proposal of expanding access to the medical field in mind. I will hold a special meeting to study it when I return to the imperial capital."

Wang Shan responded solemnly.

"It is indeed necessary to develop the medical field to solve people's livelihood problems and facilitate capital flow," Qin Long said.

"Yes, no one can guarantee that they will not get sick. If we have a low income, we must save money to prevent illness."

“Medical care is indeed suitable for water release.”

"If you want to build universal free medical care, I will definitely vote in favor."

“But the question is, if we implement free medical care, will it cause a run on the medical care system?”

Zhang Zhongchun asked the key question.

Medical runs are very common in top hospitals.

Some people rely on reimbursement and go to a Grade A hospital to see a specialist doctor regardless of whether they have a fever, a cold, or the weather is getting cold.

Are they wrong?
Strictly speaking, there is nothing wrong with it.

But from the perspective of medical resources, there are people who need this expert appointment more than they do.

It is already difficult to get an appointment with a specialist at a Grade A hospital. If free medical care is implemented for all, Zhang Zhongchun is afraid that medical resources will be excessively wasted. After all, who doesn't want to take advantage of free stuff?

It’s like selling free eggs as health supplements, which always attracts a group of elderly people to line up to get them.

“This can be graded.”

Chen Xing also thought about this question, and continued: "Farmers are basically in rural areas. The only medical resources they can access are basically county hospitals. So we can provide free medical services at county hospitals. For people living in county towns, they can go to city hospitals for free. For people living in cities, we can provide free medical services at designated hospitals."

"If the case exceeds the capacity of the county or city hospitals, it can be sent to provincial tertiary hospitals. In addition, more funds can be invested to ensure that a county has at least three second-class hospitals, a city has at least three third-class hospitals, and five second-class hospitals. This will fully realize universal medical care."

As soon as he finished speaking, Chen Xing smiled and said, "Of course, this is just my idea. The investment in building universal medical care must be huge. After all, our country has 13 billion people."

"Yes, I have noted them all."

Wang Shan nodded.

His expression and eyes were very serious, and he had already reached a certain level of approval of what Chen Xing said about the massive money injection in the medical field.

After noting down Chen Xing's proposal, he suddenly asked, "By the way, what is the new power supply agreement?"

Hearing this, Chen Xing nodded and said what he was thinking: "We are currently supplying electricity to Southeast Asian countries. Now that room-temperature superconducting materials have been developed and we are planning to develop controlled nuclear fusion, we can definitely expand the scope of our power transmission business further."

“The first is to reformulate the electricity settlement currency and use Dragon Country Currency instead of US dollars.”

“2. To pave the way for a profitable nuclear fusion and establish a community of interests.”

Since the State Grid not only supplies electricity to Longguo, but also to Southeast Asian countries, and even has business dealings with West Asian countries, there was a time when the Longguo currency actually wanted to be linked to electricity.

But considering the limitations of electricity and the lessons learned from silver, the Dragon Country Currency was ultimately not pegged to electricity.

Now is the stage of wrestling between the Dragon Dollar and the US dollar. Both sides have tried their best. If the Dragon Dollar can add the bargaining chip of "electricity", it may win the recognition of more countries.

As for establishing a community of shared interests, this is what Chen Xing took into consideration because after the advent of controlled nuclear fusion, other countries might be watching.

If at this time, there are countries that enjoy "cheap electricity" willing to stand up, then Long Country will not have to fight alone.

The man is innocent, but he is guilty of possessing a treasure. Chen Xing has considered everything carefully.

The first country with "cheap electricity" to be connected is the Russian bear in the north and the ancient elephant kingdom in West Asia.

As long as Russia and the Ancient Elephant Kingdom are willing to form an "electricity alliance", other countries will not dare to act rashly no matter how eager they are.

"This proposal reminds me that our electricity settlement is still in U.S. dollars, and we really need to hold a national meeting."

Wang Shan nodded slightly.

"I have to say, Mr. Chen sees further than I, the president of Longke Academy. If possible, I would like you to give up business and go into politics, haha." Qin Long said with a teasing tone.

"In fact, there is no need to give up. After all, Longxing Group cannot do without President Chen at the helm. We can jointly recommend to Shenzhen City and let President Chen nominate the representative seat."

"That's a good idea."

"I agree."

As soon as Zhang Zhongchun finished speaking, Yin Songyang and Hao Zidong quickly agreed.

When a businessman reaches a certain level, he can run for a representative seat.

People like Lei Jun, Pony Ma, and Ms. Dong all have their own representative seats, because these private entrepreneurs represent the domestic economic market to a certain extent, and the suggestions they put forward are definitely more suitable for the market.

Facing the suggestions of several people, Chen Xing did not refuse and said with a smile: "Let's not talk about this for now. Let's talk about it when we have the chance later."

"The most critical thing now is how to build a controlled nuclear fusion project."

As long as controlled nuclear fusion comes out, the difficulties faced by Longguo will be solved and the great rejuvenation plan will become a reality.

After Chen Xing finished speaking, Wang Shan and Qin Long looked at each other. The latter lowered his voice and revealed the shocking secret:
"We have already made plans for the controlled nuclear fusion project and have achieved certain results. If Mr. Chen has time, he can bring the technical staff with us to visit the engineering experimental site in the northwest."

(End of this chapter)