Now, I'm not one for economics, not in the least. Or, for that matter, politics. I find both are best left to other people more suited to the boredom and the backstabbing, respectively. But the more I hear about the fall of the economy the more it seems I need to learn so I can understand what's going on here.
What I have figured out is this. There was a housing bubble - people bought houses with mortgages they couldn't afford. The houses were foreclosed, the banks couldn't get their money and were shut down, and the economy crashed. In addition, the budget of the government has risen (due to war, new education and health programs, the rise of baby boomer retirees), and given us a massive deficit to deal with.
America has certainly recovered from economic crises before. It's how capitalism seems to work: up, then down, then up again. But how? It seems to me that to recover, America as a whole needs to spend a little less. We need to learn how to keep from overreaching our budgets by ousting luxuries and unnecessary things, both for ourselves and for the government.
I have a worry about that. For the government, is it even possible? Today's society expects government to do a lot. They need to refrain from raising taxes, but at the same time they also need to handle all kinds of jobs; everything from keeping the streets safe to walk on to ensuring that snow on the road is plowed. And every time there is a motion to let back on one of these things, somebody will raise a storm. No matter what we try to cut back on, there will be people who argue against it, loudly. A politician subject to this will see a fall in their popularity, and popularity is everything in politics. So few politicians (certainly not Illinois ones) will
Is this a vicious cycle? How long will this last? Can people accept that things need to change?
Hope so... It doesn't seem like we'll go anywhere if we don't.
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Brilliant points, all, Lauren!
ReplyDeleteIt is a vicious cycle, one that I believe cannot end without a huge change in attitude for the general population of our country. Such changes take time, and I fear it will not happen in our lifetimes.
There is just one thing that I disagree with you on, here. I think to help the economy, people need to spend more, get money flowing again, because money that sits stagnant, like a plant out of soil, cannot be used to make more money, cannot grow.
It's interesting -- others have blogged about similar fears of us entering a cycle. Perhaps it foreshadows our next book, a play called The Kentucky Cycle.
ReplyDeleteWant more info on the financial crisis? See what last year's AS class created:
http://www.slideshare.net/oripsolob/the-giant-pool-of-money-presentation