sunfarstar
24th February 2009, 22:26
Every day I read one economist, journalist or government official to talk about how this or that country achieve the fastest economic recovery. Needless to say, the prescription is always in conflict with each other. But almost all of these authorities, I think, are like living in fantasyland. They really seem to believe that their own prescriptions in a relatively short period of time will be able to play a role.
The fact is that the world only at the beginning of a recession, the recession will last quite a long time, and will become much worse than it is now. Government at the moment the question is not how to recover, but how they are, without exception, in the face of increasingly angry people preserve their own circumstances.
Let us talk about the current economic reality. Almost all the parties all over the world - from the government, enterprises, individuals - the last 10-30 years have to rely on borrowing寅吃卯粮. Expansion of income and consumption expansion confusing the world. Bubble bound to burst. Now the bubble has burst (or, in fact, the bubble has burst several). This path can not be sustained and the beginning of people, such as instant everyone frightened, worried that their cash will be spent, including the government, enterprises and individuals.
Fear the upper hand, at this time, people stop spending money, or stop lending. Significant decline in spending and lending, businesses stop production or the production slowdown. They need to go out of business completely closed, or at least the dismissal of workers. It is a vicious circle, closed because of winding up or laid-off workers lead to lower actual demand, so people are more reluctant to spend money or lending. This is called a recession and deflation.
At present, still be able to borrow money and printing money, the United States Government intends to put more money into circulation. If the amount of the Government's huge, and the practice of smart, may have a role to play. But most likely, it is not smart. Same is likely that the inputs can play the role of quantity only resulted in yet another bubble. As the dollar really could have dropped faster than other currencies in order to demolish the world economy, an important pillar of the final.
At the same time, the world's population, 90 percent for the lower population (10% upper is not too good), for a variety of day-to-day spending less and less money. People become unrest. Just last month, we see more and more people take to the streets to protest against the country's economic difficulties, such as in Greece, Russia, Latvia, the United Kingdom, France, Iceland, China, Korea, Guadeloupe, Reunion Island, Madagascar, Mexico, and possibly the world's media have not yet noticed more countries. In fact, so far relatively mild protests, but the Government is very nervous.
First of all, deal with the government concerned about the civil unrest, they do? In fact they are only two options: to shoot the protesters, or concessions to them. Shot only to a certain extent effective. One reason is that the military itself must be paid before they are willing to do better. The serious downturn in the economy, it is necessary to do this for the Government is not easy.
Therefore, the Government began to make concessions of its own public. What to do? First of all, the implementation of protectionism. States are beginning to complain that the protectionism of other countries. However, none complained of themselves in the implementation of protectionism. They also go further in this road. Free-market economists have told us that protectionism so that the whole economic situation even worse. This is perhaps good, but very politically irrelevant - when people took to the streets when the job requirements, and they now!
Turmoil when the government concessions second way is to take the social democratic welfare measures. But, to do so, the Government of funds required. Government funding from taxation. Free-market economists have told us that the time of an economic downturn improve (any type of) tax revenues will make the whole economic situation even worse. This is perhaps good, but in the short term this same irrelevant. Typically, the time of an economic downturn, tax revenues decline. Government can not even maintain the current expenditure, not to say that the expenditure for the expansion of the pay. Therefore, they will in some way, through taxation. Or, they will print money.
Finally, they concede a third way is the right amount of populism. The past three decades, both within the country or the world as a whole, 1% upper and 20% of the income gap between the bottom were significantly expanded. The gap will be lower in 1970 that a more "normal" level, although still very large, but not to the extent of the scandal in general. From this we see that the Government is now talking to the bankers "income cap", for example, in the United States and France. Alternatively, the Government can punish corruption, such as in China.
This is somewhat similar to those in the hurricane belt. Worst-case scenario could suddenly come to a head the Government. When this happens, they will have only a few minutes hid in the basement of their own. Hurricane scratch then, if still alive, they would come out to view the damage. Damage will be very heavy. Yes, people can rebuild. But then the real debate began - about how to rebuild, as well as about how fair and equitable sharing of benefits, such as reconstruction.
This bleak picture will last long? Nobody knows or can doubt it, but may be several years. At the same time, the Government will face a general election, while voters in the current government will not be kind. Protectionism and social democratic welfare of the usefulness of the Government as when the hurricane hit, like the basement. Semi-nationalization of the banks are hid in the basement of another way.
Required to consider and prepare the people that, regardless of when the basement when we go out, we do. Fundamental question of how we are to carry out renewal. That is the real political struggle. Terrain will be we are not familiar with. All of our previous argument will be challenged. To recognize that the key problem is that reconstruction can put us to a better world - but they can also put us into a worse world. Regardless of the kind of situation, it will be a very different world.
The fact is that the world only at the beginning of a recession, the recession will last quite a long time, and will become much worse than it is now. Government at the moment the question is not how to recover, but how they are, without exception, in the face of increasingly angry people preserve their own circumstances.
Let us talk about the current economic reality. Almost all the parties all over the world - from the government, enterprises, individuals - the last 10-30 years have to rely on borrowing寅吃卯粮. Expansion of income and consumption expansion confusing the world. Bubble bound to burst. Now the bubble has burst (or, in fact, the bubble has burst several). This path can not be sustained and the beginning of people, such as instant everyone frightened, worried that their cash will be spent, including the government, enterprises and individuals.
Fear the upper hand, at this time, people stop spending money, or stop lending. Significant decline in spending and lending, businesses stop production or the production slowdown. They need to go out of business completely closed, or at least the dismissal of workers. It is a vicious circle, closed because of winding up or laid-off workers lead to lower actual demand, so people are more reluctant to spend money or lending. This is called a recession and deflation.
At present, still be able to borrow money and printing money, the United States Government intends to put more money into circulation. If the amount of the Government's huge, and the practice of smart, may have a role to play. But most likely, it is not smart. Same is likely that the inputs can play the role of quantity only resulted in yet another bubble. As the dollar really could have dropped faster than other currencies in order to demolish the world economy, an important pillar of the final.
At the same time, the world's population, 90 percent for the lower population (10% upper is not too good), for a variety of day-to-day spending less and less money. People become unrest. Just last month, we see more and more people take to the streets to protest against the country's economic difficulties, such as in Greece, Russia, Latvia, the United Kingdom, France, Iceland, China, Korea, Guadeloupe, Reunion Island, Madagascar, Mexico, and possibly the world's media have not yet noticed more countries. In fact, so far relatively mild protests, but the Government is very nervous.
First of all, deal with the government concerned about the civil unrest, they do? In fact they are only two options: to shoot the protesters, or concessions to them. Shot only to a certain extent effective. One reason is that the military itself must be paid before they are willing to do better. The serious downturn in the economy, it is necessary to do this for the Government is not easy.
Therefore, the Government began to make concessions of its own public. What to do? First of all, the implementation of protectionism. States are beginning to complain that the protectionism of other countries. However, none complained of themselves in the implementation of protectionism. They also go further in this road. Free-market economists have told us that protectionism so that the whole economic situation even worse. This is perhaps good, but very politically irrelevant - when people took to the streets when the job requirements, and they now!
Turmoil when the government concessions second way is to take the social democratic welfare measures. But, to do so, the Government of funds required. Government funding from taxation. Free-market economists have told us that the time of an economic downturn improve (any type of) tax revenues will make the whole economic situation even worse. This is perhaps good, but in the short term this same irrelevant. Typically, the time of an economic downturn, tax revenues decline. Government can not even maintain the current expenditure, not to say that the expenditure for the expansion of the pay. Therefore, they will in some way, through taxation. Or, they will print money.
Finally, they concede a third way is the right amount of populism. The past three decades, both within the country or the world as a whole, 1% upper and 20% of the income gap between the bottom were significantly expanded. The gap will be lower in 1970 that a more "normal" level, although still very large, but not to the extent of the scandal in general. From this we see that the Government is now talking to the bankers "income cap", for example, in the United States and France. Alternatively, the Government can punish corruption, such as in China.
This is somewhat similar to those in the hurricane belt. Worst-case scenario could suddenly come to a head the Government. When this happens, they will have only a few minutes hid in the basement of their own. Hurricane scratch then, if still alive, they would come out to view the damage. Damage will be very heavy. Yes, people can rebuild. But then the real debate began - about how to rebuild, as well as about how fair and equitable sharing of benefits, such as reconstruction.
This bleak picture will last long? Nobody knows or can doubt it, but may be several years. At the same time, the Government will face a general election, while voters in the current government will not be kind. Protectionism and social democratic welfare of the usefulness of the Government as when the hurricane hit, like the basement. Semi-nationalization of the banks are hid in the basement of another way.
Required to consider and prepare the people that, regardless of when the basement when we go out, we do. Fundamental question of how we are to carry out renewal. That is the real political struggle. Terrain will be we are not familiar with. All of our previous argument will be challenged. To recognize that the key problem is that reconstruction can put us to a better world - but they can also put us into a worse world. Regardless of the kind of situation, it will be a very different world.