The great recession … why do we have this problem ? (2)

The Great Recession

By Massimiliano Della Porta (1994) LSP Assisi / Italy

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One of the most important events that are changing the world at the moment is the great recession. It started in 2008 after the American financial crisis of 2007. Because of globalization the problem spread around the world in a very short time, particularly harming Europe.
Even if it is very complicated to explain the causes and the facts that characterized this event that is still affecting our society, it is important to understand why it is happening.
Speaking in a very general way we can say that since the 90s there have been two opposite poles of behavior. One is the American, characterized by an exaggeration of greed; in fact the Americans, confident of having great economical and financial systems became more and more indebted with the banks, which in turn started to become indebted to other banks and societies using the debts as warranty to buy stocks or shares. Of course the people could not pay all the debts and after a while the system cracked.
The opposite pole is the Chinese one, which had an economical system that did not help the citizens in any way, so that they were forced to not spend. So there was neither a social nor an economical development. The industries that are in China are all property of foreign multinationals. So the government has no money.
The general problem is that there is no balance between the two systems, or rather there has been no balance for a long time.
Speaking on a global level … someone spent too much money and someone too little!
After the crack of the American bank Lehman Brothers, the European banks found themselves in a liquidity crisis. So in a short time unemployment increased, the possibility of spending for the families decreased, favoring saving and reducing demand on the global market.
But now?
Now there’s not much we can do because we must pay higher taxes to try and solve the situation. It could be a positive thing if it solved the problem but unfortunately it often happens that people cannot find the money to pay for things that are becoming more and more expensive like school or health. The worst problem is that the perspectives for the future are less and less encouraging, especially for young people.
Today, for us, choosing a university course is becoming more and more difficult because we don’t know the direction the global economy will take and the working opportunities are not clear at all.

One Response to “The great recession … why do we have this problem ? (2)”

  1. Rebollo says:

    Sadly, the situation you have described is happening now but, as you said, we should try to understand why this is happening or even why it started. I could not agree more with the idea of the two blocks you mentioned, but I would try to go deeper into the problem, if I knew a bit more about it.
    However I think both countries are guilty for not reacting soon enough and are now having real problems to overcome their fault. What is more, their slight “oversight” infected all the world and especially the European countries.
    Nowadays, as you said, with taxes being raised and expenses cut, more and more people are having serious problems to pay their childrens’ school or their doctor or what more problematic, their mortgages, which might lead to .
    I therefore suggest to renew the politicians that represent us by people who have studied law, economics or international affaires, so they can lead us to restore the wealth of our nations.