Free Essay

Global Debt Crisis

In: Social Issues

Submitted By elliemichele
Words 576
Pages 3
Risk “The world economy has hit a rough patch on the road to recovery and is in danger of skidding off course.”
Political uncertainties are growing more and more common as the years pass on. As America should be a thriving economy in the world, strong and manageable, it just so happens it is now a “crippled growth” in the global economy. The key to crushing global debt and enhancing the market economy is not to sign on to policies that put the economy at risk, but to take a risk to enhance the smaller, emerging markets. Gloom, fear and anxiety need no longer be the descriptive words for America’s entrepreneurs. We need to advance into the world, learn from other nations and rid the U.S. of the reoccurring mess of debt.
The same goes with the world as it does America: we are figuring out the present issue (which seems to be the right plan) but we are ignoring the long-term effects of what our current decisions about defeating the debt crisis will turn into. What’s happening is the U.S. economy is losing momentum. Exports from different economies around the globe are slowing down drastically due to fear of losing even more money than what has already been lost. Not a single nation, even China (who has a robust economy and booming outflows), can afford to lose money made in exports. The slower the momentum in global economies, the slower general output to advanced markets, thus increasing more reason for loans from the federal reserve and central banks, henceforth increasing U.S. and global debt. According to this article, the central bank had exceeded limits on money outflows creating economic and political risks that America cannot afford.
As it seems the global economy is in a “Catch 22,” with nowhere to go without increasing the debt. A “political paralysis,” according to this article. Most economists believe that markets must spend more or tax less to reduce global debt. However, according to the GlobalPost column, the people of Sweden are no longer struggling with a massive debt. Why? The Scandinavian Government has long since upped the retirement age from 65 to about 69 years. The Swedish people did not protest to this, either. The people of this country put a lot of trust in the government and accept that they play a massive role in citizens’ lives. The Swedish government taxes the people more, while still paying generously for health care and education. If the other global economies chose to take a risk such as this, and the people of the country actually trusted their government, debt would no longer be an issue. Taking this type of risk could very well be worth it. However, the trick is getting the people of the country to believe in the government.
There is no easy way out of debt, especially when for one country totals out to over 3 trillion dollars. Now imagine for an entire world economy. It comes down to the fact that citizens need to trust that their governments want the best for them and are doing what’s best for the economies. It’s up to the governments to take a risk, to have no fear and do everything possible to get us out of this political paralysis.
Citations
http://blogs.ft.com/economistsforum/2011/09/why-the-global-economic-recovery-is-in-trouble/#ixzz1ZfqMJgjT
http://news.salon.com/2011/08/15/global_debt_solution/

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