Covid-19 appears to be slowing down in the earlier infected countries. And some economies are very carefully and slowly moving forward, but there are no full blown recoveries yet.

We are reading and hearing about heightened stock market valuations, but we will ignore those signs for now as there appears to be little correlation to the millions of families still experiencing stressful isolation, cash shortages and future employment uncertainty.

The final deadline of temporary stimulus packages are accelerating quickly.

Time may be moving forward, but is it on our side?

Our Bermuda economy needs a jump-start and it needs it now.

What’s it going to be — that thing that supercharges the new normal? Will it be back to self-sufficiency, back to a balanced budget, or back to full employment?

In the spirit of community involvement, with encouragement from the Minister of Finance, readers and commentators graciously contributed numerous interesting and helpful ideas. Here are some:

• Domestic bonds issued alone or with asset-backed government property collateral.

• Legalisation of cannabis — to include a priority government tax at point of sale.

• A national lottery, also with a government proportionate share.

• Local entrepreneurship heightened focus, dependent upon consumer uptake.

• National pension sustenance withdrawals.

• Lowering borrowing interest rate costs.

• Sprucing up the entire island.

• Suggested invitation to Hong Kong businesses’ redomiciliation here.

• Payroll taxes, customs duty and company fees still a large component of government revenue.

• New International Business initiatives.

• Sell Caroline Bay.

• Super yacht marina enclave development.

• Revitalise the casino initiative.

• Accelerate domestic status for eligible individuals to incent property purchases,

• Generate ambitious, cost-effective Bermuda tourist travel and stay packages.

• Reducing civil service.

• Allocating more jobs for Bermudians,

• Government creation of large capital spending infusions to generate more jobs.

This is quite a list; there certainly are more suggestions out there as well. But what are the best ideas to bring significant domestic and foreign cash stimulus in now?

Can we categorise these suggestion based upon a several vital criteria:

• Sources of funding: direct and indirect.

• Time to implement and cashflow lag.

• Ease or hurdles of implementation.

First, let’s take another look at how an economy and the money multiplier works (see fig 1).

Money enters a society in varying ways:

Consumer spending

This is from an individual or a corporation.

The business produces goods or services, cash flows in and the money pays employees, payroll, fees, consumption taxes to the government, and reduces loans held by the banks. Profit is invested in new inventory or other strategic assets to increase sales.

The employee buys household necessities, saves and invests at the bank, spends at other businesses, and on vacations, education, a car, a scooter, or a home. The larger purchases are probably paid for by borrowing from the banks.

Government uses proceeds of taxes and investment earnings on those taxes to administer and employ its agencies operating for the public good, such as schools, financial assistance, civic projects, and building the country infrastructure. Government may also borrow based upon revenue projections.

The Money Multiplier cycle revolves. In a growing economy businesses succeed, profits grow, workers’ pay is enhanced, government collects more revenue, consumer spending increases, and on and on. Almost, everyone is happy. Life is good.

In the accompanying chart (fig 1), we see $100 enter the system at A (a tourist) or B (international business). As those dollars spread out through the economy, they change hands many times.

This is known as the multiplier effect.

But what happens if money supply activity changes at either end of the chain? The multiplier process receives a large jolt, slowing the money flow.

• Where does the money go at the end of the chain?

• Is it recycled repeatedly within the local economy?

• What happens if it is invested onshore, outside of Bermuda?

• What happens if the amount invested at the start of the chain drops, or increases?

• What happens if the number of consumers decrease, or increase?

• What happens if consumers save more than spend?

• What happens if only cost reductions are effected?

• How do other forces such as interest rates, pandemics, consumer confidence and other occurrences affect supply, demand and purchasing power?

The economic regeneration ideas are there, the question is: Which ones can be recognised as best, receive popular approval, and can be implemented quickly, timely, and powerfully?

The US, UK, Canada and European counterparts are flooding markets and businesses with stimulus cash, in the form of grants, inexpensive loans and support. They can make money — Bermuda cannot. We have to hone our survival skills as we have had to do many times before.

Looking at the long list of suggestions above, let’s apply the timely implementation requirement of jump starting to each idea:

Short term cash infusions:

— the idea needs to be easy to implement;

— it needs to be immediate, fast, to generate money flow boost

— it needs to be cash, generate cash, or save cash, but frankly, we need new domestic and foreign cash inflows the most;

— it cannot take legislation, agency creation, committees, or other governmental checklists and actions to set up;

— it needs to have community approval and involvement to succeed;

— it needs to generate consumer confidence in the return to a new normal economy.

Long-term strategies involving legislative actions, construction, marketing and sales initiatives will have a better chance to succeed once the money multiplier flow picks up steam. Numerous ideas have validity, but may require significant time to enact, and then need further time for results flow economically through the money multiplier system.

Moneywise is not going to express an opinion here — that has been done already.

So, what do you, dear readers, think government needs to do first to uplift the economy and get back on track?

We want you to give your opinions. Write to me at martha.myron@gmail.com, or comment online.

Decisions need to be made now, and action implemented.

Time is not on our side.

• Martha Harris Myron CPA JSM: Masters of Law — international tax and financial services, dual Bermudian/US citizen. All proceeds earned from these columns are donated by Martha and Royal Gazette to The Bermuda Salvation Army. E-mail: martha.myron@gmail.com