US Economic and Financial Crisis - Cause & Consequences

i read it and commented on it.good blog.

I liked the article. It's informative. Figures given by you are really shocking. Sometimes I think the situation is more serious than the Great Depression. I was reading some articles where they were saying that it is not recession but Depression (a deep recession). It is going to linger for quite sometime.

I just can't believe how come these financial institutions led us to this grave situation. These financial institutions were bailed out from our hard earned money. As far as my knowledge goes, the main reason of bailout was to revitalize these financial institutions to restore market sentiment. But what happened is stupendous. The executives of these institutions filled up their own pockets. This doesn???t seem rational to me at all.

Good article. Keep it up. I would like to see some good articles on stimulus plan. I???m apprehensive on this issue too. Is the bailout amount enough? Economists are saying otherwise.

Hi Paul and Enlightened,

Thanks for your comments. I appreciate.

I agree with Enlightened. Bailout money was given from tax payer's money but wrongly utilized by executives of these financial institutions. It is really shameful on their part.

But I'm very optimistic about the almost $800 billion bailout of the US economy. I hope the current bailout plan helps to generate employment in the economy. Employed will give more money to people. They will spend it in the market for buying necessities and luxury items. Thus, demand for goods will increase. The market will therefore expand and consequently our economy can again witness positive growth rate.

But Enlightened's apprehension is not totally misplaced. Noble Laureate, Paul Krugman, has said that this bailout sum is not sufficient to bring back our economy to normality.

But still I'm very optimistic about this stimulus plan.

I will definitely write on this Stimulus Plan in a couple of days.

Hi,

I personally disagree with my illustrious colleague, and what I believe to be his misplaced optimism. I think this new "bailout plan" is just fiscal lubricant to ease the downward slide toward a REAL depression.

If they truly wanted a bailout, they would re-regulate the industry, install usury caps, and suddenly billions of dollars would be in OUR hands - the serfs - instead of continuing to line the pockets of those who have r-aped* our country and its people.

Mr. Bush eviscerated the economy. There is no way around that without some serious sacrifice - namely, the sacrifice of the filthy lucre that the financial industry has greedily squeezed from the necks of the - ahem - "middle class" (ha! it is to laugh!). Ending the ill-conceived (and even downright stupid) war in Iraq will not help, as those troops (and hence funds) need to be transferred to Afghanistan, where they should have been in the first place.

So where is this money coming from, pray tell me? From the $455 billion (as of 2008) budget deficit? Print more money thus making the dollar weaker than it already is? Thin air, perhaps?

Let's see: the California economy (the world's 5th largest economy) is teetering on the verge of collapse. Al-Quaida (however you spell it) is growing at a phenomenal rate (thanks to bringing "democracy" to Iraq (ha!)).

We CANNOT just keeping tossing paper (even paper called "money") at problems and hope they'll just go away.

See this quote from the Government Accounting Office:


And one more from a report by the GAO entitled "Where Do We Go From Here?":


No, the future does not look good, my friends. Now is the time to get debt free, before it becomes impossible and we are all pwnd. The debt free may just make it through with some quality of life intact, the rest will work and work and work for an ever-shrinking percentage of what they are told they're making. Which is not Freedom, regardless of what the pundits call it.

Maybe, perhaps, everything will work out just fine. Maybe the wolves will lie down with the lambs for reasons other than supper. Maybe mankind will wake up one day and realize that life is precious, but Quality of Life is even more precious. Maybe "homo sapiens" will stop acting like hamsters - nor accept anyone who cages them in paper cells - spinning on a wheel for a couple of morsels and a lick of water and an occasional pencil jab by a recalcitrant accountant with a computer and a court date.

Yes, if that happened, I will be the first to celebrate (ok, maybe 3rd). A projection is only an opinion, reality often-times shifts according to its own bizarre rules.

We live in interesting times indeed.

chrys

*Aren't censorship softwares downright hilarious?

[quote]I personally disagree with my illustrious colleague, and what I believe to be his misplaced optimism.[/quote]

Yes, I'm optimistic about this stimulus plan though I know that this package is not adequate. This stimulus package is far less than the desired one. But still it will be able to increase demand in the economy. If you want to know more about my optimism regarding this stimulus package, please read my recent blog post on:
Economic stimulus plan of Obama - how is it going to affect you?