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SADASHIVAN
Joined: Jan 26, 2004
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Bailout and economic crisis
November 26, 2008 - 12:34 PM
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Bailout is only temporary solutions to cover what lost by financial or other industrial sectors. Bailout money is public money used to please rich sectors. This adjustment to relieve them is may be by pruning necessary social projects or overburdening its citizens with direct or indirect taxes. More taxes mean lesser expenditure is best way to worsen economic growth. Bailout does not mean better future of these sectors due to low financial demand from loss making or reduced output of industries.
1. Growing competition in banking and housing sectors to attract more and more consumers without evaluating personal capacity and uncertain economic condition of consumers rendered heavy losses to lenders and builders. Cheaper interest rates enticed customers without realizing the consequences of economic depression.
2. Tough competition and soaring running unit cost or failure to achieve expected to meet target rendered axing work force as cost cutting measure.
3. Heavy bull and bear investments on escalated valued of stocks during boom time began busting during demand crisis led to heavy losses to both categories.
4. Tough economic conditions of families rendered by high fuel, food, day to day use, education and prices of others made more and more consumers defaulters.
5. Job losses and uncertain future is major factor to render demand crisis resulted to ax work force.
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Mwashighadi
Joined: Oct 9, 2005
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Re: Bailout and economic crisis
November 29, 2008 - 03:41 AM
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This bail out thing is making us look at our economies in very intresting ways, and for the fact that we are all standing at diffrent platforms and looking at the same object we are bound to give different judgements although other times we are indiffrent. Activities in any economy are highly interwieved such that injections in one sector come as result of withdrawals in another. Take for instance the whole idea of bailing out this big companies owned by the 'rich' //the same companies have to pay corporate taxes and income taxes(thro the employees) and offcourse other trade taxes. Its the same money(poart of it) that we want to use to bail them out. Leaving this companies to die means loss of so many jobs, tax remmitances, foreign exchange , and even lower market expectations, on the other hand using the tax payers money to bailout this companies means a heavy constraints to the social/economic bugdet and an unnecesary tax burden to the individual tax payers. From this two platforms I am tempted to ask my self the same old age question economists ask; Which spending decision between the two is bound to give us highest utility?. Can we avoid the temptation of pre-emptying this idea and instead do a 'Cost benefit analysis' The good book says ' there is a way that seems good to man but in the end it leads to destruction' i hope the decision to or not to bailout this multinationals will not lead to destruction.
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SADASHIVAN
Joined: Jan 26, 2004
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Re: Bailout and economic crisis
November 30, 2008 - 01:46 AM
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Failure to concentrate on rural and urban economy resulted to disaster in Asian and African economies. Has multiplied unemployment crisis. Bailout to multinational and high mechanized industries won't help much to the rural and urban unemployed as it affects to only few urban people employed as big industries consume less manpower then the medium scale. Money bailed out belongs to all the citizens as each and every body pays tax directly or indirectly. A person who buys a bath soap is also contributory to Tax collected by governments. Bailout is direct cheating by government to its own citizens. Bailout could also be part of corrupt practice to benefit both industry and politicians this can not be ruled out
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