How can America survive from current financial crisis?
81Financial crisis of America
(This hub is published on
29 September 2008).
The United States of America is facing tremendous financial crisis. Financial institutions are breaking down. Extremely reputed, large and old Financial Institute like Lehman brothers has gone bankrupt. Washington mutual fund followed it with as big as $359 billion!!! Merrill Lynch is sold out. The Federal Government bought more than 79% stake in AIG in order to save it from bankruptcy.
Manufacturing, automobile, FMCG, retail all sectors are doing very badly. Reality sector is doomed. In fact, that has played biggest role in bringing recession. Economic slow down has started after bubble burst of housing sector.
Americans are in financial problem. Many of the American people are not able to pay their mortgage or loan. Many of US citizens lost their jobs or they are at the brink of loosing it. NASDAQ, Dow Jones, Standards and Poors all are falling sharply.
The Federal Government announced a bailout package of $700 billions. In spite, economy is not reviving. More over, it is falling sharply putting US citizens into economic crisis and financial problem.
Recession seems to be obvious.
GPS: Economists on the Fixing America's Financial Crisis
Cash and credit crunch
The Federal Government cannot afford more debts. Interest payments have the Lion's share in Government's total expenditures. Social securities may not exist anymore within few years. There will be no money left for the same. It will soon be extremely difficult for the Government to repay both internal and external debts. Dollar is losing its credit as global reserve currency.
Is America at the threshold of total economic breakdown?
It looks like so, if Americans do not change their habits.
Americans have taken it for granted for many years that economy will flourish forever. They have no hesitation in getting credit and spend it, as they like. But it cannot last forever. Now income is decreasing. Economy has started shrinking. Cash and credit crunch hit the economy badly. Mortgage, remortgage, loan consolidation, federal students loan consolidation are the primary issues nowadays. Federal students loan consolidation, best students loan consolidation are in top paid key words.
American People are
looking at the Government and political parties. They US citizens are
thinking that the next President will solve the problem magically and bring the country out of present economic crisis. They are also thinking that the new President will bring them out of financial problems.
But there are no miracles in economics. There are no free lunchs. It never happens. People have to fight for their own survival. Many other countries like China, India, Brazil, Russia are fighting tooth and nail to come out of this economic crisis and financial problems. People of America has to understand that they have to compete with them for their bread. It is in the best interest of Americans to remember that the Americans will no longer be the world leaders.
More Banks are going bankrupt
- President Obama and economic crisis of America
American people have elected President Obama, a charismatic personality. Now he has to deliver as per the aspirations of common Americans hit by economic crisis. He already declared his priorities in his first press conference as President elect. He - Top search words in internet and financial crisis of America
What can be the possible solution?
It is in the interest of the government and the people at large to change its policy of taking
loans and paying interest forever. It will be better not to go for war at
various places in the globe unnecessarily. It is the best idea to leave international policing forever.
It will help the people of America
if the Government invests its resources to develop entrepreneurship and productivity
to revive economy. Government and private parties should motivate and manage people to be productive. Low cost production of quality goods is the key word of global competition. Quality services in moderate cost can also enhance global competitiveness.
In addition, Government of America and the Federal Bank may think of selling huge gold reserve to pay
out the debt or to invest in productive area. Utilizing huge oil reserves may
also be a good idea.
The USA has much more per capita agricultural land than most of the other countries. Agriculture has huge potential of employment generation. This sector is ignored since a long time because of dependence on manufacturing and service industries. Low cost labor gives third world countries competitive advantage over the USA in manufacturing and service. sectors. America is failed badly to compete with them. The time has come for Americans to shift focus again on agriculture.
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Do Americans need to change their havits to overcome financial crisis?
See results without votingWhat are in the interest of American people?
1. Change their habits. Give up spending habits. Try to earn more and spend less. Switch to consume less.
2. Not to borrow any more. Try to pay mortgages. Discard credit cards or at least limit credits.
3. Reduce the number of credit cards. Have a zero loan policy.
4. Try to save money.
5. Invest money judiciously. Learn investing in shares and mutual funds.
6. Consume less. Save more.
7. Live life green.
8. Be vegetarian. It saves a lot in many ways.
It takes 10 KG of vegetarian food to produce 1 KG of animal food. Thus it increases cost significantly.
Vegetarian food is healthy food. Vegetarians are also less prone to diseases like cancer, cardiac stroke, diabetes, Mesothelomia etc. (Mesothelomia is a key concern now a days. Mesothelomia lawsuits are in growing number and Mesothelomia lawyers are reaping benefit).
Vegetarianism also keeps you slim and fit. Hence, reduces health care expenditures substantially.
9. Educate children in low cost countries like India where standard of education is high. Also avail health care facilities from there when and where possible.
10. Invest in Asian countries for greater returns. Indian stock market is more than triple since 2004 instead of recent down fall.
11. Search job out of America, even if it has a lower salary. Cost of living is also significantly less. Job in India is safer than that of USA.
Will America and its people change their thoughts and habits to survive this cash and credit crisis and to get rid of present economic crisis and financial problem?
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Comments
When the Federal Government announced a bailout package of $700 billions the financial markets understand that to mean the economy is in a real financial mess.
Stock market has to correct itself regardless of bailout packages or not.
The American people are economically better than anybody else in this planet. If that economy was to come down, then every other country will suffer.
When you suggest that they consume less, do you know what that means to billions of people in China, India, etc., etc?
Americans are wealthy enough but they will not if they move in the way they are. Nothing will be happened to INdians and Chinese if Americans consume less. China and India have a population more than one third of the planet.
They will not depend on America in near future.
You may read the hubs about financial problem of America. There are links to those in this hub.
dear JYoti,
I liked your suggessions. It is also aplicable to indian young generation. many hyderabadi youth also follow American lifestyle. I will suggest him to follow your advice. they be bankrut if they do like now.
Good hub.
America should start thinking in a different way. Emerging Asia has really challenged their supremacy.
Dear Shruti,
You are right but Americans are still sleeping. They are not at all interested in global issues but confined to their own space. Top 20 searched words in internet by the Americans do not include any issue outside America.
jyoti kothari
Americans are strong and they can make it through anything and they will. So we have to start over so what. Americans will also always stick together no matter what and no matter who they think should be president. If families have to move in together they will but we will all survive. They may panic for awhile but they will pull themselves together and figure out ways to make it.
Moonlake,
I wish, the Americans can.
May heaven bless them.
Thanks for the advice. The US still has great future ahead and I strongly believe that if the advice is followed, at least the financial crisis would be minimal
Change is needed in the United States. No matter if Americans want to change, The financial crisis in the United States is impacting all across the globe. Today all Americans should be developing their own plan to save more and reduce waste.
Many people around the world have underestimated Americans for generations. This financial crisis is a meltdown, but we're not out.
Not by a long shot.
Good luck to everyone reading this. India. United States. The world.
Dear Loyd Ford,
I am agreed with your views but one. The world has actually overestimated US. The bubble is burst.
Thanks for comments,
Jyoti Kothari
The world has actually overestimated US. The bubble is burst. But not by acsedent, it was engenired, blueprint from 1930 s.
Very, Very, sad. America has had a great Constitution.
Yes, the bubble is burst at last.
Jyoti Kothari
Ha! Months later and look at these posts. Yeah, China's hurting. India's hurting bad too with the American companies laying off outside help first. Kothari; it is not the US economy that Lord Floyd is speaking. It is the American spirit. It is unbelievably powerful and is the invisible thriving force of all the glory. It is not the capitalism, but the spirit for which it thrives that makes the united States what it is. I've yet to meet a foreigner who can see that.
Hi,
I agree with you. Americans are no longer the world leaders in economy. They are world leaders in recession. If they do not change they will collapse.
Mrinal
Hi Mrinal,
Americans have to change their habits as poll suggests in various hubs of me about Financial crisis.
Jyoti Kothari
I agree with most of this. I believe Americans need to learn to be more self sufficient. That goes for the government as well. Not sure about becoming a vegetarian though...I sure do enjoy my piece of meat here and there! LOL.
Hi Dagny,
It is up to one what would he like to eat. However, vegetarianism has positive impact on health, emotion, environment, and crucially on economy.
Jyoti Kothari
Hi,
It is very difficult for America to come out of the recession and progress like before. We see millions of people suffering financially.
Sue
Hi Sue,
I agree with you. It is indeed true that millions of US citizens are in financial crisis and it is difficult for them to come out off this disaster. However, they can survive if they change their habits. Many of the polls in different hubpages suggest that.
Jyoti Kothari
After these bailouts and some recent rise in DOW jones Industrial average and other US indices (and infact obvious rise in other world indices too), some people have started talking about next Bull Run.
They think, its over ,,,but do u think such huge bailouts can do it?
Never ever in history of world finance, Govt.'s have been able to control markets. Financial markets work as per All time tested Elliot wave theory and certain basic rules & they will move a per that only.
I feel pity when people are loosing jobs, its not just US..its all over... many people from other countries are also goin back home loosing jobs in foreign countries like US, UK etc.. All are in same Plane.
BUT thinking these bailouts will do the trick. NO.
I am a Market Analyst myself and have predicted the 10th Feb fall in DJI index.. (yeah ....within my friend circle only...ok...oh yes... not many others).... And i think the real pain is yet to come. Mercy is yet to be granted.
Hope the world manages it in nice way, as in these uncertain times when antisocials are galore, when militants are causing havoc, compounding of these all my lead to catastrophe.
I may sounding very pessemsitic, but thats what the world scenario is.. and every bull run has to end with a bear bottom marked by such conditions.
The difference this time is, the crisis are much deep and Big world economies like US are taking them for granted/as-usual,,,pumping money like rotten fruits... This Will just hasten the more pain. nothing else.
Hope we manage this.
Though i dont agree much with your hub , its nice you tried to bring forth the view. Some info is real truth
Regards
I think this bad economy is just what a lot of people needed to change their habits, as unfortunate as all of the circumstances have been. But, people have changed their habits and are living differently now for the most part. As for investing internationally, I think we should support the US economy as much as possible. We need a stronger sense of nationalism. What ever happened to being concerned if something was made in china?
Hi Freelance world,
I an thankful to you for commenting with relevant points. it has enhanced value of the hub.
I am of strong opinion that American Government and people at large have to change their habits to overcome the crisis. The crisis is not due to any disaster or natural calamities. It is because of wrong policies of previous administrations and bad habits of consuming more and producing less.
America can not come out again as leader in economy if they will pursue with same tactics.
I have published many other hubs describing causes of financial and economic problems and crisis.
I request you to refer those, I have written well before the crisis started. Most of them came true.
I amspecially interested to know, with which poits are you disagree, so that I can review those.
Jyoti Kothari
Hi Kiwi 91,
Thanks for your judicious comment.
America was great supporter of free economy. The Us have advocated for globalization and free world trade for half a century. Many of the under developed and developing country opposed that but the US had forced them to join the club.
Now the time has changed. The US is feeling heat of bad economy, financial problem and economic crisis. And now thinking of a 180 degree turn.
Is it good? Can it be justified in moral ground? Can the US revert their policy of free economy, capitalism and go back to nationalism?
Jyoti Kothari
Hi Jyoti,
I am totally agree with you. America is the most selfish country. It has always exploited other countries in its own interested. Now all has turned into it.
How can America dare to even speak of Nationalism? How can it be conservative after advocating liberalization for so many years?
Babb
You are right Jyoti. America has fallen of its own bad habits.
Sumit
Hi James,
I feel that you are angry at America. However, America is now in distress and we have sympathy for them.
America has given a lot to the world, Computer, internet, bio-teck and so on.....
Every thing has pros and cons. america has been falling from its throne due to its own mistake and wrong policies as I have described in some other hubs on the topic.
It is a general criteria that when in good times people behave in a different way than in bad times.
Thanks,
Jyoti Kothari
Interesting fact about the amount of vegetarian food required to produce meat. While becoming vegetarian isn't likely for most people, you can cut down substantially on your meat intake ..have a 2 or 3 "veggie" meals each week - it will save you money, make you healthier and help conserve resources.
I think there's a definite slowdown in "consumerism" that's here to stay..people will have no option but to live within their means and re-discover the simple, low cost, pleasures in life.
Hi Link financial,
Thanks for supporting the idea in comments section. Yes, if one can not be vegetarian he or she can do it partly. Partial action will bring partial result. And even that is good.
you have given very good suggestion.
Jyoti Kothari
Hi Jyoti,
I also believe in vegetarianism. These are healthy, economic and environment friendly. If Americans start, even partially, eating vegetarian food, they will get rid of obesity, diabetese and cancer. It will save enourmous amount in their medical bills.
This will be cost effective and save lot of money in economic crisis.
Sunil
Hi Sunil,
Vegetarianism is a good way of living. It is not difficult to be so. One has to change his or her mind set for the purpose.
Jyoti Kothari
Americans are in crisis. They have wrongly backed dictators like Saddam and General Musharraf in the past.
Iraq war and giving China status of MFN were blonders, they commited.
Americans have to change their habits of poking nose everywhere in the world. This habit costs them lot and people all over the world hate this idea.
Thanks for an extremele informative article. There are new ideas and I support those.
Kamal Surana
Dear Kamal Surana,
You have writely commented about the Americans. Thanks for commenting and supporting my ideas.
It is in the best interest of the Americans not poke nose in everyone's matter in the world. I agree with you.
Jyoti Kothari
Jyoti,
This is an article that opens eyes of the Americans and others. I have posted this in my blog and getting good traffic.
Anjali
Hi Anjali,
It is better for People to see inside of a phenomenon. Thanks for you to post this article in your blog.
Jyoti Kothari
I do not know whether America can survive or not. This is a doubtful question. Following your advices may help them from falling freely.
Good hub. I rated it up!
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SweetiePie says:
13 months ago
Interesting hub, but your suggestions are not applicable for most Americans. Some people may want to work in India, but I would not pose that as a suggestion for others. Also, eating vegetarian foods is a more healthful way of living, but no one person should tell others what and how to eat. One of the biggest things Americans need to do to weather the financial crisis it to invest more in American companies and to stop sending jobs over seas. Also, I try not to buy bargain products as much anymore because many of these commodities are made in China. Buy American, invest in America more, and people should not live beyond their means.