Financial Rescue Plan
by Andrew from Sydney, Australia
Regarding Financial Rescue Plan: The financial bailout plan fails to address the root causes. The financial rescue plan that is being put in place may or may not provide temporary relief to the crisis, but it does nothing to address the underlying problems with the economy.
The economy has been built on growth in consumer spending on property, goods and services that are funded by debt, unsustainable amounts of debt.
This financial bailout package aims to ‘unfreeze the credit markets’ so that borrowing may continue, but Americans, and people from around the industrialized world are already heavily indebted, and many cannot service these debts adequately, hence the financial crisis!
By attempting to continue feeding this cycle of debt, the financial rescue package will ultimately fail at addressing the root cause of the financial meltdown. There needs to be real, wholesale changes to the structure of the economy to ensure consumers are able to afford their essential purchases, while they are discouraged from making non-essential purchases that they can only afford through debt financing.
Otherwise we’ll just end up in this mess all over again, except with a bankrupt Federal Government to boot.
In the end, world governments need to recognize that essentials like housing and food need to be affordable, and that there is a place for regulation that ensure that only those able to service the debts they take on are offered credit.
The days of the subprime mortgages and credit to everyone need to come to an end – but at the same time there also needs to be a better balance between wages and profits, so that the average consumer isn’t left with debt as their only option in funding the purchases of essentials. --Andrew from Sydney, Australia
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