March 15, 2012 Due March 17, 2012
None of us are economists but it is crucial that we all understand the economy. We all want a good standard of living and without a good economy our chances of that are slimmer. How do we fix our current problems? Read the articles, cite, give opinions.
http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/31/AR2009013100132.html
- 36 comments
- Posted under Uncategorized
hussibhoa 
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Natalie McKinney
said
Abraham Lincoln said it best: “A country divided against itself will not stand”. This quote is still as powerful today as it was when he first said it. Therefore, in the midst of today’s economy, or what have you we as Americans need to remember these words. We can not continue to fight one another in the economic sector and still expect to somehow emerge from the rut of recession that we have fallen into. I like what the second article said about this issue: “So President Obama appears to have it about right: Government spending, including state and local, for a quick fix; temporary tax reductions to help households pay down debt and, eventually, spend the money to strengthen the private sector; and no permanent tax cuts that would stick us with even worse deficits than are projected now. (http://www.washingtonpost.com/wpdyn/content/article/2009/01/31/AR2009013100132.html)
However, to go along with that the article said it is also important for us to stick together in order to fix this economy. To be honest, we can’t just blame the White House for everything we see going array. Although, there are some con artists out there, we need to start being good Samaritans and helping those who have fallen on hard times who can not help themselves. Whether we start at this very moment, or not we all are going to have to work together to rise from this recession/ economic downturn. A car can’t be in reverse and in drive at the same time, or else there will be no car to drive
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Chloe
said
The question stands how do we fix our problems in the economy? Our country faces many problems daily; our main problem is our debt! “We can’t borrow and spend our way to prosperity,” said House Minority Leader John A. Boehner (R-Ohio). How do we ever expect to pay back millions of dollars if money is always being spent? In today’s generation times are getting tuff, people are trying to provide for their families and not have to worry about losing their jobs. There are many people out in the world that are job-less, if we would focus more on providing the needs of our citizens instead of “trading” & worrying about other countries, then maybe we could strengthen our people. “In a crisis, government spending has to be the first responder, with tax cuts coming up behind.” Says http://WWW.WASHINGTONPOST.COM/WPDYN/CONTENT/ARTICLE/2009/01/31/AR2009013100132.HTML.
I agree with the statement Natalie said,” We cannot continue to fight one another in the economic sector and still expect to somehow emerge from the rut of recession that we have fallen into.” If we expect a change we have to come together and make it happen. We all have to want a change, before a change can take place. Our job is to stick together and rebuild our economy!
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dancan16
said
Our nation needs to stop with all the loans first of all.We cant keep loaning other countries millions of dollars anymore.Thats definitely getting us into a economic hole that were not going to be able to climb our way out of.Were already in debt to China billions if not trillions of dollars and the more money we loan out to other countries , the less money we have in order to pay china back and eventually Chinas going to want their money back sometime or another.A big problem is that we as a nation lend out too much money as it talks about in http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis.
I agree that a good way to get our economy up and running again is to increase government spending as it talks about in http://www.washingtonpost.com/wp-dyn/content/article/2009/01/31/AR2009013100132.html. If we increase government spending there goes the unemployment problem.More jobs will open up and less people will be out of work.Thus people will be able to spend money which in turn helps out our economy.No longer will so many people have to be careful about what they spend because their lack of money.More people will be employed and will be able to live the way they should.When the people are living the right way then the economy has no other choice that to benefit from it.
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giiirrrlll
said
“ The goal must be to avoid an outright collapse or deep recession” as stated in http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis&page=2,I agree with this because it is nearly impossible for us to stop something that were at the verge of. First of all debt seems to be the biggest problem in our economy..many want loans to buy stuff and end up not being able to pay the bank back and that’s whats keeping us from moving forward. The best way I see in solving this is paying it back and how can we accomplish this? By reducing taxes people will be able to retain some of their money and hopefully pay off their debts because otherwise they won’t be able to like it is said in http://www.washingtonpost.com/wp-dyn/content/article/2009/01/31/AR2009013100132.html. Foreclosures should not completely stop but try to be reduced because there are many houses taken by the bank that aren’t being bought therefore both people and the banks will be negatively affected. Instead banks should extend the time for the loans to be paid back and that way the buyer will keep its house and the bank might suffer a little but it wont be a total loss. I don’t think only lowering taxes for the poor is fair or good for the economy I believe lowering taxes on both the poor and rich will work. Because by lowering taxes also on the rich that own companies than they can hire more people that will later lead to the decrease in unemployment.
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invitingodin
said
The best way to boost the economy fast, the model shows, is to increase federal spending on goods and services — things like cars, office space, military equipment and construction. Unemployment drops quickly and GDP jumps.. this quoute from Jane Bryant Quinns article . to me sounds like a war on us soil will promte the most growth . i believe the gov should invest in small business instead of large corps b/c the large corporations of america has already reached it limit of expanding in america an now their expanding in other countries. now the small business in ameria will continue to grow and expand in america before they go to other countries. or the fastest way to fix all money problems in the world is a socialist gov or communist
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paviles2013
said
“The origin of the U.S. financial crisis is that commercial banks and investment banks lent vast sums—trillions of dollars—for housing purchases and consumer loans to borrowers ill-equipped to repay” http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis
– That statement pretty much says how dumb our economists are, if they know that the people who borrow money are not gonna pay it off, then why would you spend trillions of dollars to lend to them?
“When the easy lending slowed and then stopped during 2006-07, the housing prices peaked and began to fall. The housing boom began to unravel and now threatens an economy-wide bust.” -This could have been avoided by checking and making sure that the person has a good history of paying things on time.
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Zully C
said
“The inventory of unsold homes is now large; housing demand and new construction will be low for many years. Consumer spending on appliances …plummeting. All these consequences are largely unavoidable and will force the U.S…..with unemployment likely to rise temporarily to perhaps 8 percent.” The quote above is stating that the demands on housing and on autos are low therefore, the country and aslo, the businesses aren’t gaining any profit. The unemployment will increase and there isn’t going to be any money to buy or puchase goods. It’s like a cycle that we are in. How do we fix it? Well I think that we make more jobs avaiable the unemployment will decrease and more money will be spend. Yes, there is always going to be obstacles in the way but I think this is the way we will ever be back on track. Also, with Obama’s plan this will help the economy get back up! and this is what we are counting on. “….Barack Obama’s program is counting on individual tax credits. Temporary tax credits and rebates affect the economy more slowly than government spending. Consumers don’t spend the whole check at once and may use part of it to build up savings. But the money gradually helps revive private-sector demand. ”
.
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sadierankin
said
How do we fix the current problems in our economy? it sure isn’t by spending.“We can’t borrow and spend our way to prosperity,” said House Minority Leader John A. Boehner (R-Ohio) http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis
How does the government ever expect to pay back the all the money we owe? Currently our national debt is $15,514,0173,000,000 ( http://www.usdebtclock.org/ )
and with that in mind i do not believe spending is the best way to solve our economic problem. All we are doing by spending is digging the hole deeper and deeper for not only ourselves, but our children and grandchildren. i think that the government should reduce their spending on unnecessary things, and make an attempt to pay back the debt we owe. because we cannot put this burden on the people, to put it in perspective if every U.S. citzen had to help pay off this debt it would be $49,532 per pearson, and i dont know about you, but i sure don’t have that type of money laying around. the bottom line is to help get ourselvs out of this economic crises our goverment needs to cut spending and pay back what we owe.
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huntercochran
said
“The U.S. economy faces four cascading threats: First, the sharp decline in consumer spending on houses, autos and other durables, following the sharp decline in lending to households, will cause a recession as construction of new houses and production of consumer durables nosedive. Second, many homeowners will default on their mortgage payments and consumer loans, especially as house values fall below the mortgage values. Third, the banking sector will cut back sharply on its lending in line with the fall in its capital following the write-off of bad mortgage and consumer loans. Those capital losses will push still more financial institutions into bankruptcy or forced mergers with stronger banks. Fourth, the retrenchment of lending now threatens even the shortest-term loans, which banks and other institutions lend to each other for working capital. Interbank loans and other commercial paper are extremely hard to place.” (http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis). If we can do something about these threats we may stand a better chance at having a better economy. “The goal of any new policy cannot be to prevent a recession. It’s too late to stop such a downturn. The goal cannot be to save every bank. The U.S. economy has built up too many imbalances—consumer debt, overextended construction, impaired capital of banks—to avoid an economic downturn and a major retrenchment of the banking sector. The goal must be to avoid an outright collapse or deep recession. Two actions are therefore critical, and two more are subsidiary but still important.” (http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis&page=2). We don’t need to prevent a recession because it’s too late on that. We need to focus on preventing a complete collapse of the economy and to prevent a deep recession that cannot be reversed or will take more than one generation to bring back. We are heading towards a collapsed economy and we need to fix it. Once we fix everything we will worry about getting the economy boosting again.
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ravenwomic
said
” Most important, the government
and Federal Reserve Board must
prevent the collapse of working
capital by supplying short-term
loans and taking other measures to
sustain the commercial paper
market, interbank lending and the
smooth functioning of money
market funds. They have the
instruments to do so, and should
use them aggressively. The
government should also
aggressively promote a
recapitalization of the banking
system so that bank lending is not
squeezed for years to come.” ( http://www.scientificamerican.com/
article.cfm?id=fixing-financial-crisis)
To fix the economy the government has to start supplying short term loans! the government should just re construct the banking system in a way that will promote economy growth. We can’t keep blaming everything on Obama because he has no control over the bad economy he inherited! Basically the government and the american people need to work together to come to common ground on how the economy can improve.
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wendyburris2013
said
” Government spending, including state and local, for a quick fix; temporary tax reductions to help households pay down debt and, eventually, spend the money to strengthen the private sector; and no permanent tax cuts that would stick us with even worse deficits than are projected now. ”
( http://www.washingtonpost.com/wp-dyn/content/article/2009/01/31/AR2009013100132.html )
I agree with the statement above . Another thing i think would help the economy is to stop borrowing money from other countries ! borrowing money from other countries is just putting us more and more in debt . It seemed like Obama really helped out the country with the stimulus package he sent to everyone . our country aint as bad as it was then but maybe another one of those would help us out even more .
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jackrosemond
said
Bottom up, trickle down and many more. What type of economic “healing” system works best? In my opinion, and i am not doing this to get out of a long creative blog, there is no way to solve the economic”problem.” for over 200 years our nation has had processes that they follow to keep the economy tamed. None have worked, or fully worked. The United States has such a large economy that we can keep it tamed but never fix the problem.
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Miriam
said
I think the question here is a little bit deeper than how to fix our current economic problems. That’s something that will take a significant amount of time, and anything that is done quickly will probably not be effective for long. The question is also deeper than how to relieve the burden of the economic situation. That can be done in several small ways, but as previously stated, few of those would be effective long-term.
One of the examples given in the article was banks’ loaning money to those who cannot pay it back. This is obviously a very big problem for the economy which was worsened when the banks then crumbled. Obama’s bank bail-out allieviated this some, but not nearly enough. I think the best thing for the economy at this point would be to increase government spending just enough to get the economy back on its feet.
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OhSnapBethany
said
There really is no fixing the economy, sorry, its completley ruined. “The origin of the U.S. financial crisis is that commercial banks and investment banks lent vast sums” ( http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis ). Americans are just way to greedy. We over use and over spend on every little thing. weither its food,houses,clothes, cars, material things. We DONT NEED half the things we waist are money on but yet we continue to do it. “We can’t borrow and spend our way to prosperity,” ( http://www.washingtonpost.com/wp-dyn/content/article/2009/01/31/AR2009013100132.html ). Republicans must stop holding America hostage and Democrats must stop their co dependant behavior. Only then, can we move forward in an honest, decent manner that helps instead of hurts our country.
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Brayan Salazar
said
“The goal of any new policy cannot be to prevent a recession. It’s too late to stop such a downturn. The goal cannot be to save every bank. The goal must be to avoid an outright collapse or deep recession.” I personally think that their is no way to fully end the economic problem, but we can stop it from growing. I feel that we can bring it back to normal by following the two steps that Jeffrey says at the end. First “ease the repayment terms on existing mortgage holders” and secondly we must “encourage expansionary monetary and fiscal policies abroad” At the end of the day I feel that United states will find a way to bring our economy to a normal economy, but it will never be fixed, in fact as noblit tells us in class other countries (CHINA) will pass our economy, and we will have to learn to share, personally don’t care if our economy is the best as long as it is a decent economy.
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calebbynum
said
The United States of America has dug itself into a pit of debt that will take a long time to escape from. This problem has many short term solutions to boost the economy. As this passage states “The best way to boost the economy fast, the model shows, is to increase federal spending on goods and services — things like cars, office space, military equipment and construction.” (http://www.washingtonpost.com/wpdyn/content/article/2009/01/31/AR2009013100132.html) This boost in federal spending in these areas will create jobs, and will help the American people. This rise in employment will pump money into the economy, and will ultimately help the economy.
However, this is only a short term solution that will not solve the large problem that the US has on its hands. This passage states it the best, “The U.S. economy has built up too many imbalances—consumer debt, overextended construction, impaired capital of banks—to avoid an economic downturn and a major retrenchment of the banking sector. The goal must be to avoid an outright collapse or deep recession.”(http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis) A recession is unavoidable, so it’s the government’s job to prevent a complete collapse of the economy. A long-term solution must first address this before it can fix the big problem.
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spongebobswifey
said
” Government spending, including state and local, for a quick fix; temporary tax reductions to help households pay down debt and, eventually, spend the money to strengthen the private sector; and no permanent tax cuts that would stick us with even worse deficits than are projected now. ”
( http://www.washingtonpost.com/wp-dyn/content/article/2009/01/31/AR2009013100132.html )
I myself agree with the statement above and I also agree with the famous saying of Abe Lincoln a house divided against itself cannot stand. That statement is very true. We as a people government has GOT to come together instead of working against each other. How on earth do you think anything about this economy is going to improve when you got two opposing views and non compliance on both sides. Nothing will ever get completed that way , stop complaining about what is not done and actually DO SOMETHING that is WORTH WHILE. We spend so much time on things that digs us in a deeper hole. That’s all I have to say about this one, ish don’t make no sense….
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thomasbyrd18
said
The origin of the U.S. financial crisis is that commercial banks and investment banks lent vast sums—trillions of dollars—for housing purchases and consumer loans to borrowers ill-equipped to repay. http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis The first article clearly states the origin of the economic problems in the opening sentence. I don’t know a lot about he economy, but I know the US is in a lot of debt and that obviously comes from borrowing money that is spent but can’t be repaid. I believe that to solve the economic problems would be to reduce the amount of lending and loans, especially to those who are unlikely to repay it. However, ultimately I just believe that we will all have to just slowly crawl out of the deficit.
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car1995
said
What cause the recessions the housing bubble bust. What caused the depression in 1929 the roaring twenty stock market bubble. a economic bubble occurs when a items value is artificially inflated past the standard trade value.all bubbles bust the dot-com bubble busted and caused a small recession in the early 2000’s but was helped when the Federal Bank lowered their interest rate.
the key to preventing economic downturns is to identify the current bubble and slowly and safely deflate it to the standard value. Also in time of economic downturn the government needs to spend to make up for the loss of the private sector trying to get back in the black, Once the private sector is safe give them tax cut to increase capital and give consumers tax cut to increase spending power once the economy is safely above the recession point slowly decrease tax cuts to both the private sector and consumers as they start to make more and hire more. at that point is when the government can start to balance their budget. the key to fixing the economy is not Reaganomics of Keynesian economics but a combination of the two where they meet in the middle and help everyone become prosperous. when times get tough we cant sacrifice humanity to balance a budget we must spend to preserve humanity and after humanity is safe balance the budget money can be sacrificed unlike humanity which is what FDR thought also.
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Juan
said
the only way to revitalize the US economy is by spending government money. that is how we saved General Motors and the major banks of america is with the stimulus plan. without the stimulus plan we would be in a depression. even though spending money puts the US in a bigger hole with its decifit, we need to spend money to make money.
“The best way to boost the economy fast, the model shows, is to increase federal spending on goods and services — things like cars, office space, military equipment and construction. Unemployment drops quickly and GDP jumps. The second-best GDP driver is direct aid to states and cities, to keep current projects going and start new ones.” (http://www.washingtonpost.com/wp-dyn/content/article/2009/01/31/AR2009013100132.html)
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EmilyKiser
said
How do we fix our current problems? “The goal must be to avoid an outright collapse or deep recession.” (http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis&page=2) The problems of our economy today are only small confusing things that lead to one major problem. That problem involves heading towards recessions, job loses, debt, many other economic problems. The solution to solve our problems is to trust our government. Ultimately it is up to our government to get us toward solving our problems. The government has to focus on fixing things. Instead they are focused on arguing with each other about which party is the “right” party, which presidential candidate they can target this week to bring down, and other totally ridiculous things that do not matter at the end of the day. “So President Obama appears to have it about right…” (http://www.washingtonpost.com/wp-dyn/content/article/2009/01/31/AR2009013100132.html) If he has it right, and the things he is doing are helping us, then why are there still politicians and citizens who aren’t “happy” with what he is doing? The ONLY way we will fix our economic problems is for the men and women who are apart of the government to stop with ridiculous tactics and start working together to get it right.
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chelseaclark2013
said
” The best way to boost the economy fast, the model shows, is to increase federal spending on goods and services — things like cars, office space, military equipment and construction. Unemployment drops quickly and GDP jumps. The second-best GDP driver is direct aid to states and cities, to keep current projects going and start new ones.” (http://www.washingtonpost.com/wp-dyn/content/article/2009/01/31/AR2009013100132.html) I think this statement says it best. If the government spends money on things like cars and etc, people will get job , which will cause our GDP to rise. Then, when you finish and start new projects in states in cities, those brings jobs also , which cuts the unemployment rate and helps our economy rise.
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kenziekiser
said
The economy will not improve in anyway until the government, as a whole, comes together to solve the problem. Nothing will be changed, and the economy will not, in anyway, improve if the government can come together. Have two opposing sides just makes the economy worse, and that is why the economy is not improved.
“Government spending, including state and local, for a quick fix; temporary tax reductions to help households pay down debt and, eventually, spend the money to strengthen the private sector; and no permanent tax cuts that would stick us with even worse deficits than are projected now.”
http://WWW.WASHINGTONPOST.COM/WP-DYN/CONTENT/ARTICLE/2009/01/31/AR2009013100132.HTML
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nikiafleshman
said
I think that the best way to fix the American economy right now would be for the government to start supplying and giving out short term loans. This would genereate more money i think around the country. “Most important, the government and Federal Reserve Board must prevent the collapse of working capital by supplying short-term loans and taking other measures to sustain the commercial paper market, interbank lending and the smooth functioning of money market funds. They have the instruments to do so, and should use them aggressively. The government should also aggressively promote a recapitalization of the banking system so that bank lending is not squeezed for years to come.” http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis. The government also needs to do more spending to help the economy. By doing this the unemployment rate is this lowered, which in turn betters the economy. Then by consumers having more money, producers begin to make more money, thus helping to fix the economic problems.
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Julius "SO SEXY" Blue
said
JULIUS “SO SEXY” BLUE
In my opinion I believe the best way to fix the economy is to continue doing what Obama is doing now. From the first article http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis, I can see that the main reason of the huge economic crisis started with homeowners. This is almost like a repeat of the Great Depression. The article did not tell us but the decade before the huge recession was a time that was booming. During the 90’s everything was booming, you had technology that was coming into the limelight: internet, PC’s, cell phones. Then people got over confident and began getting credit. Differing from the GD most of this credit was in the form of housing mortgages. At the end of the decade people got too confident and could not afford their mortgage and everything began falling down. All this led to the banks cutting back on the amount of money that they lend. I think Obama is right with what he is doing like in http://www.washingtonpost.com/wp-dyn/content/article/2009/01/31/AR2009013100132.html. Obama is giving money back into the economy my giving homeowners tax breaks and he is making low interest rates. Obama’s low interest rates will allow for more money to be loaned to the bank to be put into circulation. I think the plan of more money into the economy would work unlike having stricter regulations on how to get credit. People will be the same and the money that they are not putting into the house they would be using it somewhere else. The best thing to do is help with jobs and you can even benefit as a society because you can place jobs in education and the military. Everyone will benefit from these types of job
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Bryan J Lopez
said
In both of the articles that I have read it just gives a summary of how America’s economy are plummeting. which in the parts of the article “How to Fix the U.S. Financial Crisis” it summarizes the four major problems that the economy is caused and effected by. The onr of the four major problems that I believe to be first of fixing is the one that would the fourth problem of the four. Since the article does state that out of the four this would be the worst one. This problem mostly deals about the money market, short-term commercial paper, and business. The effect that this problem had made in the U.S is that the U.S. economy fell by around 25 percent during the Great depression. I believe that if the govenment could be able to reverse the effects that this problem had made in the U.S. then it would be able to help create new buisiness, and that would be able to increase more work for the people who are unemployed. I mean we can fix the other three problem that are involving other conflict, but I believe that if this problem is taken care of out of the three, then it would be able to help citizens gain money, and that would lead into people buying things that would make an impact in the economy. Thus would be fixing all three of the four problems. In the other article “Obama’s Recession Fix Fits Economists’ Models” it talks about how U.S. problems from the past had been in effect from the start, and what the U.S. can do to be able to get back to normal standards. My main focus was in the article that had pointed out the four problems, but in this article it shown the past mistakes that the U.S. economy had faced. In my own opinion, I believe that if we can look back from all our mistakes such as: “Shades of 1937. In that year, the economy was improving and Roosevelt — on the advice of his bankers — turned conservative. He cut government spending, raised bank reserves and increased interest rates. It was a disaster. The U.S. plunged into a second recession.” than we can learn from that mistake and be able to choose an alternetive desicion instead of the same desicion that had caused that problem.
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Savana Childers
said
“We can’t borrow and spend our way to prosperity,” said House Minority Leader John A. Boehner (R-Ohio).
This is one thing I definitely agree with more than anything having to do with this topic. I feel as if we as American’s think that it’s okay to keep spending and keep borrowing, but it’s not! Spending sends us in a debt that is almost impossible to escape, s when we eventually can’t spend anymore, we borrow. After borrowing so much, that gets you even further in debt. I feel the greed in the economy today, but I think it’s comes from the basis of all the things beginning with the earlier presidents/governments. We’ve had up-downs in our economy all through history, for example, the Great Depression.
“The U.S. economy faces four cascading threats: First, the sharp decline in consumer spending on houses, autos and other durables, following the sharp decline in lending to households, will cause a recession as construction of new houses and production of consumer durables nosedive.”HTTP://WWW.SCIENTIFICAMERICAN.COM/ARTICLE.CFM?ID=FIXING-FINANCIAL-CRISIS
I like this part particularly in the article because it explains what we are dealing with at the moment in our economy and kind of where we stand. After all of these things plumitting, obviously we as consumers are going to still keep on spending. Which in turn is going to make prices go higher because no matter how high prices get, companies aren’t going to have to worry about it, because we will keep on spending because we feel that it’s what we NEED even though it’s a WANT.
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Michael Knight
said
The American economy is declining, the living standard in America is changing drastically because America is falling behind China as global leader. By 2020 China will be the number one producer in the world. America will no longer be using 25% of the worlds resources for 2% of the worlds population. I believe the only way to truly fix this problem for the entire world is to become a worldwide communist government. Vladimir Lenin believed this to be true because as long as there are conflicting governments, there would always be problems within every country around the world.The easiest way to believe in this idea is to think of Jesus Christ in which so Americans believe was a socailist. So to fix all of our problems shouldn’t we do what Jesus would do? This is the solution to America’s and the worlds economical problems.
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Brittany Bell
said
“We can’t borrow and spend our way to prosperity,” said House Minority Leader John A. Boehner (R-Ohio).The economy today is just awful we borrow money knowing we can’t give it back. We owe china and other countries so much for lending us everything they have. Eventually they are gonna stop and we are gonna be in debt so far up to our a** we aren’t gonna know what to do and we are just gonna be stuck with nothing.
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dasiaboo95
said
I believe some things that we should do to fix our current problems are to stop borrowing money we cannot pay off. We are borrowing money from other countries while buying their stuff how stupid can we be maybe if we stop spending around 45 percent of our money on military we would not have this problem. “The origin of the U.S. financial crisis is that commercial banks and investment banks lent vast sums—trillions of dollars—for housing purchases and consumer loans to borrowers ill-equipped to repay” http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis ‘When the easy lending slowed and then stopped during 2006-07, the housing prices peaked and began to fall. The housing boom began to unravel and now threatens an economy-wide bust.”
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Damaris Jimenez
said
The origin of the U.S. financial crisis is that commercial banks and investment banks lent vast sums—trillions of dollars—for housing purchases and consumer loans to borrowers ill-equipped to repay. (http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis) The problem with today economy is that people can’t afford to buy things, so they start using credit cards, borrowing or etc when they know good and well that can’t pay that back. This is when we start heading into a recession because we begin to spend on houses, autos and other durables, following the sharp decline which serves as construction of new houses and production of consumer durables nosedive. We can our economy buy spending on the things we can afford and save for the things we really want, before using a credit card or anything else…
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sorry4dawait24
said
The way we fix our problems is to increase federal spending on goods and services these things like cars, military equipment and construction.Also with a socialist government and or communist. The u.s. financial crisis is that commercial banks and investment banks lent vast sums trillions of dollars—for housing purchases and consumer loans to borrowers ill-equipped to repay as stated in (http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis)
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kalebrostmeyer
said
“The origin of the U.S. financial crisis is that commercial banks and investment banks lent vast sums—trillions of dollars—for housing purchases and consumer loans to borrowers ill-equipped to repay” http://WWW.SCIENTIFICAMERICAN.COM/ARTICLE.CFM?ID=FIXING-FINANCIAL-CRISIS
Lending out money that isnt there is killing the economy, and thats something that is going to have to stop in my opinion. I am not by any means an economist but i still see a problem in this. Banks that loan and do not recieve the proper repayment are doing nothing but hurting our economy.
“Most important, the government and Federal Reserve Board must prevent the collapse of working capital by supplying short-term loans and taking other measures to sustain the commercial paper market, interbank lending and the smooth functioning of money market funds. They have the instruments to do so, and should use them aggressively. The government should also aggressively promote a recapitalization of the banking system so that bank lending is not squeezed for years to come.”
on the other side of the argument, however, is that banks must spend more and more in order to stimulate the economy and lower unemployment inadvertently. Im not sure what the proper solution is, but someone should come up with one, and quick.
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jdr2012isthebest
said
According to the article, “Government spending, including state and local, for a quick fix; temporary tax reductions to help households pay down debt and, eventually, spend the money to strengthen the private sector; and no permanent tax cuts that would stick us with even worse deficits than are projected now.” is the way to fix the economy. I think this is what we should do the question is why haven’t we done it yet? (http://WWW.WASHINGTONPOST.COM/WP-DYN/CONTENT/ARTICLE/2009/01/31/AR2009013100132.HTML
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petercipriano
said
“First, the sharp decline in consumer spending on houses, autos and other durables, following the sharp decline in lending to households, will cause a recession as construction of new houses and production of consumer durables nosedive. Second, many homeowners will default on their mortgage payments and consumer loans, especially as house values fall below the mortgage values. Third, the banking sector will cut back sharply on its lending in line with the fall in its capital following the write-off of bad mortgage and consumer loans. Those capital losses will push still more financial institutions into bankruptcy or forced mergers with stronger banks. Fourth, the retrenchment of lending now threatens even the shortest-term loans, which banks and other institutions lend to each other for working capital. Interbank loans and other commercial paper are extremely hard to place.”
I believe if we were to fix the ecoomy we need to focus on geting people the jobs thats so many of us desperatly need. If more people have money tey can buy things that the government needs to regulate itself thus ending economic collapse.
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southernbelle94
said
To fix our current problems first of all Americans rich or poor have to work together, meaning rich people which is less than like 10% of the nation need to start helping poor people or the middle class way more than they do. I know that sounds “communist” but it’s true. “The gravest risks to the economy come back to front. The fourth threat is by far the worst. If the short-term commercial paper and money markets were to break down, the economy could go into a severe collapse because solvent and profitable businesses would be unable to attract working capital” http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis paper money means almost nothing anymore, the price of the American dollar is dropping in countries all over the world, and its because of the state of our economy, which the bigheaded politicians think they can “fix” but the truth is the only people who can truly fix the economy are the ones who actually deal with the consequences of it being bad, the poor Americans, not the bigheaded politicians who have PLENTY of money. “The first threat, the cutback in sales of housing and other consumer durables, is the Humpty-Dumpty of the economy that cannot be put back together” http://www.scientificamerican.com/article.cfm?id=fixing-financial-crisis The only way the housing market will get put back together is if people stop charging such high prices on houses, and the banks stop charging so much interest on people. “To keep the economy rising, the moribund private sector has to ignite.” http://www.washingtonpost.com/wp-dyn/content/article/2009/01/31/AR2009013100132.html This means the private sector (rich people) need to start helping more and more with poor/middle class, that would seriously help the economy, but as long as the big headed rich lying politicians are in office, that’s never going to happen.