World wide economic crisis

I've been reading, watching, hearing news about this, and still cant figure how it started and can be fixed.Stimulus bills are being presented to legislative branches of the governments of the world, but how can it help the economy? where can the governments get those big amounts and will not further destroy the economy?

the money is being borrowed from the future, this means that in 10-20 years time taxes will go up to pay it back. Personally, I think governments should give all their citizens a large lump sum. They will then spend that money, putting it in the hands of struggling businesses, and kickstarting the economy from the bottom up, not the top down.

what do you mean borrowing from the future? so for example they pass 1 Trillion bailout/stimulus bills, thats not really legal tender? its just money on documents?I'm sorry if i'm slow in registering it in my brain. how does a stimulus/bailout bill works? is it like we give automakers or banks portion of that money, or is it like credit, like "we will loan you 100billion which will be payable in 10-20 years?

it's numbers on paper. Yes it is like credit, but it's not the companies that receive it that pays it back, it's the taxpayer.

it's an opportunity to become rich! if you look around the net, you can find people that will say the same thing. they even give an example of several companies from the past and they were successful during economic downturn.

The way to fix the problems of borrowing is to borrow more? Sounds like fail to me

Loonylion · #2the money is being borrowed from the future, this means that in 10-20 years time taxes will go up to pay it back. Personally, I think governments should give all their citizens a large lump sum. They will then spend that money, putting it in the hands of struggling businesses, and kickstarting the economy from the bottom up, not the top down.

That is exactly what I think Loony, I don't know how many of us here live in the U.S. (I do for one) but this is sure frustrating, the politicans need to pull their head out of their a*s and think like a normal person. I heard that they could give every man,woman, and child in the U.S. 8,700$ dollars(that might be off a little, can't remember exactly) from this new stimulus package. Someone in congress or whatever suggested that and they said flat out no, can you believe that?!?! These people are so stupid. I hope all those old jerks die from a heart attack or something.

If you give every citizen of the US like $8700, the government expects that every citizen will expend that money. The problem is like people, I would say someone like me,will just save that money and spend it when the economy stabilize.so, how can the economy stabilize, if thats the case? i dont believe that when someone gets a big amount like that, they will go to a spending spree.

Replying to #8

they'll spend some of it, and save some of it. Either way it helps the economy since most of the bailout cash is going to banks anyway.

i really hope that when people recieves money from the goverment, they would spend it and put some in banks, and those banks should be checked constantly by the goverment, so that it will be invested properly rather than enriching those sadistic bank directors

damanali · #8If you give every citizen of the US like $8700, the government expects that every citizen will expend that money. The problem is like people, I would say someone like me,will just save that money and spend it when the economy stabilize.so, how can the economy stabilize, if thats the case? i dont believe that when someone gets a big amount like that, they will go to a spending spree.

Unless the person on said spending spree is one called Paris Hiltion. XP

paris hilton wouldn't get any of it, she already has plenty of her own.

Hopefully not.
I swear, she must be some sort of robot invented by the government to entertain the masses with her slip-ups and stupidity. XD

Loonylion · #2Personally, I think governments should give all their citizens a large lump sum. They will then spend that money, putting it in the hands of struggling businesses, and kickstarting the economy from the bottom up, not the top down.

That's a sure fire way to kill the economy...The more money there is, the less 'valuable' it becomes
It doesn't carry the same worth as it used to, because there is loads of it
Thus, the price of goods/services rises because people aren't getting as much as they used to for these goods/services
(they might be getting the same figure, but it won't have the same value)Then we're back to where we started....
What do we do then? Introduce more 'money' into the economy?
If we keep doing that we'll be back to the days of the trillion dollar note...The basics of monetary inflation.
Like it or not, most people in important positions know what they're doing.
It's the incompetence of a few that got us into this shitstorm

How is it resulting in more money that what they're currently doing? It's the same money, just distributed to the citizens rather than being pumped into the banks.

Replying to #15

I don't see how leaving the banks in the current state they are (I'm assuming the British banks are as ****ed as ours)
and yet still pulling money from other areas (health etc.) in order to give citizens spending money is a more desirable option than recapitalisation.The banks will still be screwed and without them there is no economy...
There won't be any expansion and only larger business will thrive(I can only speak for my own country here..)
We were lulled into a false sense of security and made think we were 'rich'
when in fact we were living in a credit based economy
Then when the banks collapsed and stopped giving credit we in a way had no moneyI'm not an economist, I never will be and I never want to be
but the only way out that makes sense to me is to cut back now/in the future
in order to refinance banks and get them lending to businesses again

billions have been pumped into the banks here and they still aren't lending, instead they're trying to issue massive bonuses to their executives. All the money given to citizens would eventually find its way to the banks (either them saving it, or spending and it ending up in the store's bank).

too much saving up rather than spending wisely made the economy go down. money cirrculation makes the economy work, you make stuff by buying stuff, then you sell them to buy more stuff. if you just make then earn, but you dont spend again, the money stops and the economy goes down.also, i'm not really sure but, buying second hand cars or stuff, also is too blame. if you buy second hand things, the original makers goes broke because only a few will buy their new products and that will mean, less work or produce, then massive lay-offs. who need 100 workers just to make stuff that can be done by 10 people? if we demand more, they produce more, then more people will work to produce those demands

people buy second hand stuff because they can't afford the new stuff.

Also ethic trading comes into this, they raise the price so the poor people who grow the crop get more but the supermarket still gets their big profit, so quite a few people can't afford to buy all 'ethic' foods, so there still is issues with both sides. And here's another piece of information: We pay oversee aides in our taxes without a choice whether to do so or not but this is meant to help the traders who sell us things so cheap anyway, so hopefully that will ease your conscience...