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October 11, 2008

Is Government Action Needed To Stop Economic Crisis?

The world is in financial crisis. Iceland is on the verge of declaring national bankruptcy. Japan is eying stimulus packages to help save their economy. The Canadian dollar has slipped twenty cents in value in recent weeks. The employment rate in the United States has hit record numbers. There are a few countries that are doing okay but no country is doing great. Food shortages, wars and volatile stock markets around the global are making life more difficult for everyone.

The United Nations Secretary-General Ban Ki-moon and economic analysts are urging governments to get together and do something. The credit crisis coupled with a global recession is causing trouble for everyone from corporations to individuals. While some government refuse to sue the word recession when they are talking about their personal economies, it is clear that we are in one right now Recessions are felt on kitchen tables and in savings accounts. It does not matter if presidents of countries do not acknowledge it. With that said, it seems like is should be the most important issue for governments around the world.

Analysts say that acting now is very important if we are to head off further crisis. However exactly what needs to be done is up in the air. Some say that it is the housing and credit crisis that must be dealt with. Mentions of a second stimulus check have been rumored around Washington but he first stimulus check did not make much of the dent in the recession. Consumers are spending less because they have much less money. That means that a stimulus check will likely be looked upon as an opportunity to save. Not to mention, a few hundred dollars is typically better saved than spent even in better economic times.

The credit markets are what many think need to be fixed first. Countries need to come together and stand behind the credit markets. Analysts are recommended that the G7 extend the talks to including emerging markets. The International Monetary Fund is suspected to be working towards some type conclusions. Whether or not they will be able to come up with any type of solution remains to be seen.

The United States and Europe are seeing their stock markets fall drastically. It is just a matter of time before the crisis spreads to the Asian markets. The bailout plan that the United States government put in order has not had any type of positive effect on the economic crisis. With such a huge amount of money going towards the former billion dollar corporations that helped to cause the economic crisis, another huge monetary solution by the Untied States seems unlikely at this time.

The worst part about the global economic crisis is that there is little that individuals can do. That means that we are all little more than sitting ducks. Jobs and housing are uncertain. Savings accounts are depleted. As people in the world become more desperate the need for governments to do something becomes more pressing.

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