The world crisis is a reflection of modern economic problems

If you look at the news feed over the past few years, then almost every week you can find messages about the next manifestations of the financial crisis. Yes, this topic has already set the teeth on edge, or rather, how this crisis is being fought. Numerous congresses and summits are still ineffective, since there is no agreement between their participants so far.

According to many financial analysts, the beginning of the global economic crisis was at the time of the collapse of the banking system’s confidence in depositors and vice versa. For example, the American economy, which is largely tied to domestic consumption, has lived on credit for too long. Houses were built, people took out loans to start their own business, and so on. And very often such loans were issued without sufficient financial security. On the other hand, the abundance of risky transactions that trust funds were fond of led to the fall of this pyramid, as a result of which long-standing problems in an economy that lived beyond its means were exposed. Banks began to raise interest rates on loans, provoking an increase in the number of problem loans. The population, on the other hand, could not find money to repay borrowed loans, which entailed a drop in demand and a slowdown in economic growth..

If you look at the European continent, then here the global crisis manifested itself in a number of other factors. For example, the economies of countries such as Greece and Spain have long lived, like the United States, beyond their means. Too large and unsecured social payments led to the fact that the expenditures exceeded all possible budget revenues. The governments of these countries have found nothing more successful than austerity policies. Yes, on the one hand, such a policy helped to save budget money, and on the other, the decline in purchasing power and the rise in unemployment only exacerbated the crisis. As a rule, regardless of countries and continents, two models for solving economic problems are proposed. Proponents of the first approach, such as Germany, advocate austerity and cuts in social benefits. Proponents of a different approach propose to stimulate economic development. For example, investing in the creation of new jobs that will allow people who have lost their jobs to repurpose. Yes, the global crisis has brought many difficulties to the economies of different countries, but it can be overcome. The main thing here is to find a common language.

The economy is a delicate balance between the interests of some and the possibilities of others. Any excesses here are unacceptable and will only lead to deepening crisis phenomena.