WHAT IS ECONOMIC CRISIS?

WHAT IS ECONOMIC CRISIS?

For sometime now, the whole world has been engulfed in an economic crisis commonly referred to by many as economic meltdown or money meltdown. Within this period the world economy has witnessed stagnation, then recessions in its diverse economic sectors. The standard of living has drastically waned and developing Nations have experienced retardation in the growth of their economy. Moreover, this economic situation has increased the rate of unemployment as many who were previously employed lost their jobs. The United States, the economic power house of the world is said to have been affected quite seriously than any other nation. It is more acceptable that this economic thralldom started first in the United States and as the world power house it spread to other parts of the world.Notwithstanding this many of the poor economies have been crushed to their knees especially those of the African continent. Instead of improvement they have serious problems in different sectors of their economy. Unemployment which has been a chronic kwashiorkor in these African economies has only increased by a hundred per cent. The perpetuated imbalance of terms of trade can answer for this.However, economic crisis is a ‘sick economy.’ Economic crisis is the misappropriation of priority into sectors of economic counter productivity. The channeling of economic resources into sectors of non-production. It is the continuous ill-use of resources in an economy without any production to regain the cost of those resources. In precision, economic crisis result from a long lack of attention to the productive sectors of the economy. That is when industries, companies, that generate revenue are neglected and much attention is given to non-revenue generating sectors like the security, the economy is likely to experience crisis of imbalance revenue allocation.CAUSES OF ECONOMIC CRISESFor now it is still difficult for economists and economic analysts to pin-point factor(s) as the root of this present economic crisis. But a very clear look at the economy of the United States since the administration of President W. Bush will provide an insight as regards the cause or causes of the economic crisis. This will have us to handle most imperatively the annual budget of the era of that administration looking out to evaluate his priority of revenue allocation in productive and non-productivity sectors.Since 1989/1990, United States’ foreign policy has centered on maintaining the status quo that is being the world Super Power. The United States presidents especially those of the Republican Party have always believed that war is a continuation of policy by admixture of other means. The era of President W. Bush so to say intensified this belief as it obvious in the Iraqi war effort. Believingly, economists have revealed that the budget allocation to the military was very far above those of education, commerce, health, all of them being productive sectors. This same economic crisis is the same thing the Soviet Union witnessed when the resorted to armament in the course of the cold war and resultantly their economy bowed to the United States.In anyway, it is logically sound that the perturbed United States’ economy affects those of the world. Gone are the days when Liverpool was the New York of our time. Everyone will concur that since the U.S dollar is the international standard currency that anything affecting that dollar will reflect to the whole international economy. So, should we air that president W. Bush failed in his economy policies or that he was so myopic to see the consequences of his misappropriation of resources in the economy thus the present economic crisis. In a more clear diction, we can adduce the cause of the economic crisis as the consequence of President W. Bush’s intensification of armament at the expense of other productive economic sectors.Comparatively, since the end of the Second World War, Japan has experienced a great improvement in her productive sectors of the economy. This particularly is because of her policy of complete disarmament which has enabled her to concentrate on productive sectors of the economy with little or no attention to the military. But the United States has been the exact opposite updating her arsenals and combat readiness. This has however, endangered her rank as world number one and almost jeopardised the high standard of living of her citizenry.
Tags:2