What can we do to help solve the current global economic crisis?
This week, while we citizens continue to lose our jobs, our savings, and our patience; the Group of Twenty Finance Ministers and Central Bank Governors (aka the G-20) will convene in London to try to figure out some solutions to our global economic crisis.
Since this is truly an international problem, we’re asking this question on all of our international Answers sites, too. The Best Answers will be featured in a coming blog post. So, let’s give our economic leaders something to think about! We look forward to all of your opinions and ideas.
- Hari JannLv 51 decade agoFavorite Answer
Back to Swadeshi
Up to now the world politicians and the capitalist believed that capitalism would not fail under any circumstances but the current economic crisis world over is a clear reflection of failure of capitalism (America) and its consequent effect all over the world. As the overall impact of the recession around the world is due to the crash of the American Economy, I have occasionally mentioned America in this answer, my due apologies to my American friends if their sentiments are hurt.
Failure of commodity market!
The beginning of 80’s saw a new trend infact a new term initiated by America, OUTSOURCING. Over the last decade America has been gradually making redundant employees, closing industrial units and outsourcing cheaper goods from around the world, specifically China and creating employment elsewhere. America was once proud of its strong consumer base and Capitalism, as the list of outsourced goods grew, local employment opportunities started shrinking and also gradually shrinking was the buying power of average Americans. The same American consumer which was once its strength? Approx two million Americans have lost their jobs just in one calendar year 2008 itself. All the countries that followed suit had the same impact.
Failure of Financial Market!
While financial market did not had much impact due to outsourcing of labor force but the reason for the failure has been same as that mentioned above its reason has been same as above failure of commodity market. While funding of loans has been quite liberal in America, from where an unemployed consumer is suppose to pay for his loans. Economist may say that crash of stock market may be the reason for the loses but it is the other way round the stock market collapsed due to the mounting irrecoverable bad debts of individual institutions.
The same industrial houses who over decades have made thousand’s of billions in profit by shifting manufacturing basis outside America in the name of cost advantages have never passed any of these benefits to the consumer and America has seen higher inflation year to year and never tried to delve into the causes until they were making profit and the treasury was receiving the taxes. Surprisingly, the same corporations are queuing for government aid for their survival.
Every day few billion dollars are added to the original aid and have lost count of overall aid whether it is US $ 2000, US $ 3000, US $ 4000 billion …….. Will this help to revive the economy the American Economy is still not ready even to crawl. Some of the leading American industrial and financial houses, banks, and insurance and pension funds are almost bankrupt and asking for more financial aids from the US Government for its survival.
Who runs the economy?
It is neither the so called great industrial houses or banks or economist or politicians but it is the simple CONSUMER he is the true power that runs any economy. The needs of an average consumer are simple - a steady job to sustain him and in turn he sustains the economy. The repercussions in economies that have outsourced cheaper goods from offshore for more profits at the cost of local industry and JOBS are today evident.
Infact I feel that President Obama should had done the other way round splurged the billions on the American consumer instead of institutions and banks, these would had helped them repay their loans and revived the banks and similarly the money would had help to revive the commodity market and in turn created demand and the ball would had set rolling.
How to revive the economies?
If we have to revive the economy in all fronts entrepreneurial, industrial and financial it is necessary to return back to the ideals of Mahatma Gandhi and ‘SWADESHI’. SWADESHI – to manufacture ourselves from our own resources everything and anything that is possible for us. Instead of outsourcing from abroad which only creates employment opportunities elsewhere and helps other economies? Reopening closed units and setting up our own manufacturing facilities that will create more local employment opportunities increase the buying power of the consumer (put the money back into his pocket) who in turn will help to build a strong healthy economy and all of us can thrive and prosper collectively.
The above contents are edited version of my blog listed in the source below
- YDLv 51 decade ago
Some of the great minds are addressing this issue , right now , in the various countries . We cannot ask for anything better than this . It is not just the economists who are involved . Sociologists , scientists , free thinkers ... are all involved . They feed their findings and recommendations to the country heads at the G 20 summit. The world expects that these recommendations will be implemented and monitored . So far so good.
Then what goes wrong after this? It is in this implementation that individual countries fail. These country heads may have their own political compulsions and ground realities that make them hesitate to take harsh decisions to implement , fearing some backlash and loss of political base . At this crucial point there is no accountability This is where the G20 and United nations should address the issue .
In the earlier years Security of the nations and common natural calamities made the countries come together under the banner of the United nations.Today economic crisis is equally , if not more , an international issue . The United nations should be given powers to pull up wayward countries if they fail to implement the G20 recommendations . If a country head of a rogue nation can be tried for treason and murder of citizens ( at the Hague court) an economic offender of large proportion should also be hauled to the world court for that offence . G20 countries` heads will call this an 'internal matter' and shut the UN out ! This should be changed . An AIG , a citi bank , an auto maker failing anywhere in the world spills on to the world follor and a few greedy people are responsible for these manipulations . These rich people challenge the governments with their own crooked legal ways . if these people are hauled to the world court the world will know their misdeeds. But this is a mere wishful thinking . It will not happen .
Alternate energy holds the key to turn the world to another direction . 30 years ago oil changed the economy and lives of millions in the middle east . Mere deserts got converted into oasis and the dollar reserve and dollar trade in oil is choking the world. Find a new energy . and we will find new avenues opening up. May be Africa. May be south america.
Implementation is the key.
- 1 decade ago
Global markets are said global because they function together. I purchase an american product and inturn an american purchases an indian product and this keeps both the countries in good times but if i start dumping products for throw away prices into america then the local companies will go down. The same applies to the job market, if one country starts offering jobs for peanut salaries compared to what america can then eventually all the companies (U.S) will move to india for cutting costs, now if that happens its a great thing but again if all the companies move to india then local americans will also lose jobs which inturn means that they will stop buying products, which inturn means the companies which moved to india will no longer have any customers to offer their services.
Since it is an international problem, americans should start purchasing more all-american products to save their ailing industries. This will hit china badly but if american companies fail then the jobs associated with them will also go which inturn means that the biggest consumers of products will come down heavily. I am an indian but somethings which i say may not sound music to some people, including my own people...
We should not forget that america still is the biggest consumer. India, china and even europe combined cannot beat america for consumption of goods. I am not saying that china or india cannot enjoy economic success but they should do it in a balanced way. Remember, that if some people think that bringing down america economically will help them then they are wrong. I seriously feel that our bussiness leaders did not behave responsibly when bringing american jobs to india. Forget about the jobs coming to india, indian companies behaved ruthlessly when it comes to H1B1 visas. Bringing down cheap labour from india and employing them in U.S perhaps was very bad for the economy as more and more americans went out of work and eventually the biggest consumers became cautious while spending.
This economic downturn was bought about by collective failures not individual ones. Economic growth for one country should not mean recession for the other because that will bring down all the economies even the ones which are growing at a good rate.
If it has been a collective failure then it should be a collective effort to get ailing economies out of trouble. While growth in india and china is great, it should not cross boundaries of insanity to bring down old economies.Thats what i call a bubble economy, all this time we were living in a bubble and were happy that india and china have grown exponentially. Remember, we all depend on each other and believe it or not, world economy is very much like a family. If one member is seriously sick then it affects the other. Badly.
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- Anonymous1 decade ago
the economic slowdown is due to the saturation of the market. the employees are not getting salary and hence they are not purchasing anything and so the companies are not earning anything. i think that if we were able to produce something new, something people come to buy in this economic crisis too, the markets will get money and the employees will will get money and they will buy new goods and the process will go on.
also we have to cut the salaries of the upper class employees to an extent that that they can meet their requirements and provide the salaries to the starving other employees then many other employees can get their living.
someone has to take the risk by investing money or the flow of money comes to an halt.
actually in countries like india and china have not been affected to that extent due to the better economic policy. also in india it is mainly the high earning people who have been affected. the high earners have invested in the real estate business which has fallen down and gave loss to the higher end people. i don't think it should be considered as effect at all since they are now learning not to spend lavishly. also the people who lost employment are the incapables. they should learn that knowledge has victory.
in the other countries someone should take the loss of investing money to produce something new. then it provides salary to the people which makes them buy everything. then the producers will mushroom to attract the consumers and the other employees will start to earn. the flow of money starts and the recession comes to a halt.
- Anonymous1 decade ago
There are some economists who think very big I am not a economist but will talk the common man.
In my views the government instead of spending by giving it the industries shall give it directly to the people who further shall spend it.
The tax to be more on the riches who can afford it and wages to the govt employees to be increased the salary of the top CE Os to be decreased .
The cost of the production in the developed countries to be decreased by other means not by reducing the salaries of blue coloured workers but by reducing the salaries of white coloured workers who draw more salary and reached a saturation Point in buying.
The government shall expand more on the infrastructure then to expand on the subsidies which only serve the political purpose.
The countries shall reach a pact where the movement of labour and the material can move any where in the world without any restrictions which will certainly bring the improve ment in the demand and the supply so that a man can come for some time work and go back to his country.
- KathrynLv 44 years ago
Return to Constitutional government and Constitutional money. That strips the power from the global bankers and corporate elite who have hijacked both political parties here and in other G20 nations. The crisis was engineered by global bankers and now the global bankers are conveniently offering you a solution - a global financial order that they can exploit on a global scale. Don't gobble it up. The answer is smaller government as prescribed by the Constitution. We must elect Constitutionally conservative politicians, both democrats and republicans, at all levels of government. The free market will work itself out if the globalists stop manipulating it for their own agenda.
- 1 decade ago
The root cause of this current Global economic crysis is "INTEREST BASED BUSINESS." and " FUTURE TRADING" in share market. As we can calculate, the total real investment in the Global Economy is about 65 trillion US Dollar but Future Trading Share investment is about 600 to 800 trillion US Dollar, which is much higher than the real investment. Probably the chances are always high for the manupulation of the actual cost. It should be restricted by the Govt.and should be treated illigal!
Due to the higher rate of interest, govt. have to mentain the same rate of growth. Due to this, the cost of the thing become higher and make a gap between the consumer price and the actual cost of the product.
We should think about interest free Banking System. The chain system of the interest should be stopped!!!!!!
- Anonymous6 years ago
The global economy constructively is a 360 degree economic wheel,plying the path of sustainance under a time axis of 8760hrs/annum. The interconnectedness of the global economy and missing cooperative efforts of nations will always subject the global economy to continuous challenges as both policies and strategies,problems of these nations are interwoven.
To address global economic challenges in practice...the current structure of the global economy is almost collapsing...There is no head way with this current structure. The global economy needs to be reconfigured[restructured] The solution to continuous global economic problems lies in the ability to search for the exact global economic solution framework[engine] that will generate a subsystem of the global economic system that can easily be accessed, monitored and controlled. This framework in effort to interconnect world nations will assign a common base economic formula, structuring independent economies, generate each subsystem of a nations economic system and in the long run connect these subsystems to form a global economy subsystem. The challenges facing the global economy is continuous...this framework in order to tackle global economic problems will have the capacity to run continuously...The best way to address global economic problems is to run with a framework that picks on 'piloting the ship of state' which involves observation, communication and control.
EM/389 Global Economic Solution Engine has over the past eight years completed its incubation stage, it currently calls for development and implementation among world nations. It is a little drop of oil that without it the ocean runs dry. We can give this a try where other solution framework fails.
- Anonymous1 decade ago
People shud try for jobs in different fields even if thats not the field they had in mind.
Even if they dont get a job they shud try to improve their skills as this will increase their chances of getting a job.
People shud also be willing to work even if salary is less coz the global economic situation is not that good.
But mostly i think only the governments have the power to change the situation.
I read in paper that there cud be upto $11trillion of black money hidden in safe havens. If we can get that it cud be used to improve the economy. Also we can know the extent of corruption and put those corrupt people behind bars.
- Santhosh SLv 51 decade ago
The present global economic crisis is mainly due to our own lack of decision making skills. If each one of us struggles to make ends meet then naturally, the service providers will also try to avoid making quality improvments to existing systems. Have faith in the economic summits and leadership forums that are occupied by younger generation of MBA's, CA's and Management Gurus. Certainly the words of our mentors will live on with us in our efforts to guide India towards safety and economic freedom.
Increase spending and keep investing in Nationalised Banks via Fixed Deposits and Current Accounts. Keep depositing your funds in safe and secure networks. They will grow and you can reap the benefits in the longer term.Source(s): CB 1038 CB 2 13525 HDFC BANK HIRANANDANI GARDENS 108 HSBC INDIA OFFICE 19111984