#13: The Global Economy
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J
Juliacoolo
It's the governments fault mostly. If more governments were more public, we would have less corruption, and less rebelion. That, and less greedy officials would help get the world back together, which will never happen.
Juliacoolo, that's impossible. Government is stuck for a favor-based system. We elect State representatives, so all they care about is keeping their position by benefiting their constituency, the State they represent. Guess what suffers in this system? That's right, the nation as a whole.
The US has decent democracy, I admit, but it has major flaws and unless we completely reform the system (not to mention coming up with a good system in the first place), then we'll have to live with the flaws given to us.
The US has decent democracy, I admit, but it has major flaws and unless we completely reform the system (not to mention coming up with a good system in the first place), then we'll have to live with the flaws given to us.
Let's see...
-American house market
-the loan system in several parts of the world
-sport people being paid 3 million or more for kicking some balls (soccer being a glaring example)
-bank directors and the like swallowing up all the money they can through 'bonuses'
-The change of currency in Europe (I want my Gulden back) that caused prizes to double up to 2,2x
-I remember something about the British ministers getting themselves some free treats from the money paid by the citizens
Do I need to go on?
Yes, it could have been prevented...but now that it is happened, I don't believe it can be fixed. Good thing I'm not attaching to much value to my materialistic possessions.
-American house market
-the loan system in several parts of the world
-sport people being paid 3 million or more for kicking some balls (soccer being a glaring example)
-bank directors and the like swallowing up all the money they can through 'bonuses'
-The change of currency in Europe (I want my Gulden back) that caused prizes to double up to 2,2x
-I remember something about the British ministers getting themselves some free treats from the money paid by the citizens
Do I need to go on?
Yes, it could have been prevented...but now that it is happened, I don't believe it can be fixed. Good thing I'm not attaching to much value to my materialistic possessions.
I wrote this essay for school. Its not strictly the topic we're discussing, but its close enough. I think it may fuel some discussion. Be prepared for a 5,000 word read if you can be bothered. Its called: What can history teach us about the credit crunch?
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J
Juliacoolo
LOL, that's why I said it would never happen.Zyflair said:
another reason that he economy is as bad as it is, is because people, especially European, and Americans' knowledge is Biased by media. SO many people just go by what they here on FOX news, or whatever Party-based TV channel. As long as they can go to McDonalds, and watch TV, a good amount of people don't care what goes on around them. Greed is the main cause IMO.
*edit* About the athlete thing, Eli Manning just made a 97 million dollar deal. Gosh, it takes a lot more skill, practice, and time to be a college professor who makes say, 60 G a year. It's the media that makes kids who get lucky in college millionares in the draft. That's BAD.
I think that there is more going on than just greed. Education could help also, but EVERY SINGLE THING in the western society is biased in 1 way or another. It's hard to find what really matters.
What happened was this: The banks lowned to much money to too many people without checking their income. Now the banks were losing money so they quite lowning money. Now most things that you had to lown Money to buy like cars, houses ECT... could not be boughten. Then it slowly took over as people quite buying houses. Then everyone started cutting back on EVERYTHING so all those companys had to cut jobs beacuse they were making less money.
That was only in America, yet, it effected the whole world slowly, but I don't think that that was what really started it. People have been wasting money for years (sport anyone?) so this was kinda bound to happen IMHO.
I think it happened because the US can never get enough money to pay its debts...
So what does it turn around and do? It makes money appear from nowhere to "bailout" the "important" industries in America (the automobile industry for example). So why can't they make that money appear again to pay their debts? I think I'm missing something here...
Honestly I don't think that our current President is doing his job well. He advertised in his campaign that he would be an agent of change, and yet he's been like almost ever single President in the past by not keeping to his campaign promises. That's some real change right there...
You can argue that he hasn't been in office for even a year yet, but he gave the impression that he would get all his objectives done faster than what reality would allow. If we had just let the crash happen back in the 70's and 80's then we wouldn't have to deal with it now. We'd either be getting out of it now or we'd be in the middle of one. Instead we ended up causing a bigger crash.
We'll just have to see what genius move he makes next...
So those are my thoughts on this mess.
So what does it turn around and do? It makes money appear from nowhere to "bailout" the "important" industries in America (the automobile industry for example). So why can't they make that money appear again to pay their debts? I think I'm missing something here...
Honestly I don't think that our current President is doing his job well. He advertised in his campaign that he would be an agent of change, and yet he's been like almost ever single President in the past by not keeping to his campaign promises. That's some real change right there...
You can argue that he hasn't been in office for even a year yet, but he gave the impression that he would get all his objectives done faster than what reality would allow. If we had just let the crash happen back in the 70's and 80's then we wouldn't have to deal with it now. We'd either be getting out of it now or we'd be in the middle of one. Instead we ended up causing a bigger crash.
We'll just have to see what genius move he makes next...
So those are my thoughts on this mess.
/\ You have to understand that sure the president said he'd do stuff, but he doesn't have as much power as people think he does. Plus change takes time, he's just trying to fix most important part first.
If I recall they stopped paying attention to credit scores and income because congress passed a bill that basically said 'if they wanted the money they had to get it' or something like that. Then people got greedy and carried away and tried to make money that way.
Of course that's only one reason.
PokeKid Brandon said:
If I recall they stopped paying attention to credit scores and income because congress passed a bill that basically said 'if they wanted the money they had to get it' or something like that. Then people got greedy and carried away and tried to make money that way.
Of course that's only one reason.
Juliacoolo said:
No it is not. This problem derived mainly from the financial institutions doing Sub Prime Lending.
While the government may have some flaws, the financial aspect is decent, not great, but decent. The only way we could have prevented this was if congress or whoever stepped in and said that Sub Prime Lending was banned.
afstandopleren said:
- The American house market is due to Sub Prime Lending.
- Loan systems in several parts of the world are almost identical to the United States. You may have some tax breaks here and there, but overall fairly identical.
- The sports industry is a very large part of the global economy. While you may not agree with them getting paid so much, if they didn't pay, you wouldn't have as many commercials. With not as much commercials, you would have less businesses etc. The Romans created the coliseum for a reason. For entertainment, and to get the citizens off their backs.
Juliacoolo said:
Greed is not the problem. The financial corporation's decision on the Sub Prime Lending incident is the problem.
Could we please stop about the sports thing? It's called taking advantage of the system. Just because Donald Trump may make much more than the vast majority of the world, doesn't mean he doesn't deserve it. I'll even bet you that he works LESS than half the American population. It's called letting your business work for you. Don't work your business.
Zyflair said:
You're argument has nothing to do with the subject. With your frame of mind, watching any television is a crime. That being said, anything you do on the internet would be a crime too. You're not bettering the world in any way. Odds are, you come here to pass the time and amuse yourself. In essence, that is what they're doing.
afstandopleren said:
More education is not needed. What is needed is better education. Every single High School is biased to the fact that you're going to work for someone. What if you want to be your own boss? You're automatically being graded upon something you never plan to do.
In addition to that, even if you plan to work for someone else, you're still being graded on things you will never do. Frankly, you won't use half of the stuff you learn in High School. The only reason you should be forced to take everything is if you don't know what you're going to do when you grow up.
PokeKid Brandon said:
Not exactly.
Suppose David (or whoever) went into a financial institute. David wanted to get a Sub Prime Loan because his friend said he was able to borrow a boat load of cash with a very low interest and monthly payment. So David asks if this is true. Naturally the Sub Prime Lender says it is, but there is a little thing he mentions. After so many years, the loan will balloon into larger payments. At this moment in time, David is thinking this isn't good because he won't be able to pay for it later down the road. However, the Sub Prime Lender quickly tells him that he will be able to pay for the increased monthly payments. His little trick is to have David refinance his house when the payments start increasing. David and so many others liked this idea, and naturally agreed to it.
Now logically, this idea would have been foolproof. However, to refinance your property for a higher amount (assuming the mortgage amount barely went down), the property value has to increase. So essentially these people were banking on inflation. Here's the problem; the real estate market took a natural dip. So, when people tried to get their houses refinanced when their loan payments started to increase, they were quickly declined. You can't refinance for a lower amount than what your house is worth. Therefore, all those people during that time period lost their house and basically everything. With that, you now have a large influx in house foreclosures. This in-turn lowers the values of the houses even more due to the large supply on the market. So this cycle keeps going and going. More and more houses go in foreclosure, and more and more houses go on the market. Thus, the prices of property declines even more. With that, everyone starts to suffer. Less people are now buying cars, less car companies buy parts, less suppliers buy materials, and the list goes on and on. Everyone is affected by this.
Don't worry, it doesn't end there. The reason why this turned into a global problem was because these banks packaged these Sub Prime loans and sold them to banks around the world. So when these loans went belly up, the whole world started to suffer. Banks are the center of the economy, if they start to suffer, everyone suffers.
It is impossible for Oboma to stop this. Time has to take its course for this problem to be resolved. I estimate that Sub Prime loans will be still hitting the market for at least one and a half more years. After that, we have room to start building up our economy again. Oboma can only place rules for this to never happen again. In my opinion, his sole duty right now should be to make sure the banks don't fall. If the banks fall, we're in major trouble.
afstandopleren said:
Wasting money is not anywhere close to accurate. If people didn't "waist" money, you wouldn't have stores or any form of entertainment.
As stated before, this is solely due to the financial market.
DarthPika said:
Even billionaires were sucked into Sub Prime Lending. So no, they're not stupid people.
ragingphantom said:
First of all, creating more money is not the solution. That is one thing Bush really shouldn't have done. He kept putting more money in the economy by printing it. Thus we get more inflation.
If the government didn't bail out those companies, we would have been suffering even more. How many employees do the automobile companies hire?
As already mentioned, time is the only cure to this mess. Instead of worrying about this, people should be pushing him to work on renewable energy sources and fossil fuels.
/\ I second everything you just said.
It starts with the American stock market. If it has success, all the other markets follow suit. But, if the market here fails, all the other markets fall like dominoes. They get all bottle necked because of one simple mistake that causes the entire economy to dip into a nose dive.
Banks and people buying houses they couldn't afford started the problem. Paulson and Greenspan made it a lot worse IMO. Compared to those idiots, Obama is a genius. And maybe it could've been prevented but it's way too late to talk about what shouldn't have happened.
dmaster out.
dmaster out.
Unbridled capitalism. :/
Everytime I hear about the great impact of the recession, I hear about the capitalist West. The governments should have imposed more regulations to ensure a stable economy. If they had, I doubt this would have happened. About America's recovery... It is not necessarily about time. China is not a totally communist state, with the reforms in economic policies by Deng Xiaoping, making its economy more like free market capitalism, but with more government intervention. While countries like America and Japan suffering from the recession, China is recovering. The Chinese government reacted rather swiftly and came up with a stimulus package last November, while Obama's stimulus package came into effect only this February, after he was elected. I wonder whether Bush could have done more during his last days in office.
On another note, I have always felt that the US was too concerned about foreign policy. Everytime America popped up on the news (I'm not living in the US) during the Bush administration, it was always about Iraq, Iraq and Iraq. Now, even though major domestic issues such as healthcare are popping out, the US is also trying to handle North Korea, Iran and Afghanistan at the same time. Obama just has too many things to handle at one time.
Everytime I hear about the great impact of the recession, I hear about the capitalist West. The governments should have imposed more regulations to ensure a stable economy. If they had, I doubt this would have happened. About America's recovery... It is not necessarily about time. China is not a totally communist state, with the reforms in economic policies by Deng Xiaoping, making its economy more like free market capitalism, but with more government intervention. While countries like America and Japan suffering from the recession, China is recovering. The Chinese government reacted rather swiftly and came up with a stimulus package last November, while Obama's stimulus package came into effect only this February, after he was elected. I wonder whether Bush could have done more during his last days in office.
On another note, I have always felt that the US was too concerned about foreign policy. Everytime America popped up on the news (I'm not living in the US) during the Bush administration, it was always about Iraq, Iraq and Iraq. Now, even though major domestic issues such as healthcare are popping out, the US is also trying to handle North Korea, Iran and Afghanistan at the same time. Obama just has too many things to handle at one time.
One problem with the American economy is the fact that the new administration is not creating wealth, just moving it around. Obama is trying to "fix" the economy but what really needs to occur is consumer spending. Businesses need to be able to stay open, so they can create more jobs, increase productivity, create wealth, and spend the money to help benefit the economy. That is the proper way to stimulate the economy.
You can't just borrow your way out of a recession, you have to create wealth not just borrow it from taxpayers. The first thing the government should do is protect businesses, without businesses there practically is no economy. Most businesses struggle because of too much intervention and regulation and therefore become less productive. This mainly occurs because it costs too much to keep up with all of the regulations. And besides the government wasn't designed to manage businesses. It was created to protect its citizens.
Also have you seen how well the U.S. government handled this "Cash for Clunkers" program? Wasn't it supposed to last until November? Now they had to add $2 billion of taxpayer money to it? Besides how efficient have other government agencies been in the past? Has the Post Office ever been very efficient? Or the DMV? Wasted a lot of time waiting. Not very efficient if you ask me. Now the U.S. government owns a car company. Now they're trying to get rid of private insurance companies too. It's almost like they're trying to build a resume.
Bottom line: Get private businesses back to productivity, create more jobs, listen to and protect your citizens, and stop wasting money.
You can't just borrow your way out of a recession, you have to create wealth not just borrow it from taxpayers. The first thing the government should do is protect businesses, without businesses there practically is no economy. Most businesses struggle because of too much intervention and regulation and therefore become less productive. This mainly occurs because it costs too much to keep up with all of the regulations. And besides the government wasn't designed to manage businesses. It was created to protect its citizens.
Also have you seen how well the U.S. government handled this "Cash for Clunkers" program? Wasn't it supposed to last until November? Now they had to add $2 billion of taxpayer money to it? Besides how efficient have other government agencies been in the past? Has the Post Office ever been very efficient? Or the DMV? Wasted a lot of time waiting. Not very efficient if you ask me. Now the U.S. government owns a car company. Now they're trying to get rid of private insurance companies too. It's almost like they're trying to build a resume.
Bottom line: Get private businesses back to productivity, create more jobs, listen to and protect your citizens, and stop wasting money.