The world economic system refers to the world’s nations, their individual financial systems, and the associations that connect them in an international marketplace. However, the total collapse of the American housing market [2007] and the global economic disruption that trailed in 2008 brought the phrase “economic meltdown” into focus. For people crushed under a heavy load of credit card debt, a debt settlement program provides them with a sigh of relief. Times are tough and it’s now an accepted fact that a majority of the people are handling some sort of debt or the other. Whether it’s US or Europe, people are finding it difficult to make ends meet, despite working hard.
As for America, it’s neck deep in debt. If you add up everything that American citizens earn in a year, the figure reaches nearly $16 trillion – an incredulous amount of money. Today, America is indebted by the same amount to its creditors. The nation’s overall production per year equals its total debt amount. The scenario is not very different in Europe. In 2011, more than 16 European countries were head over heels in debt. A chain of fiscal tragedies that started in 2002 gave birth to a European financial insecurity, including rising debt held by banks and different European federal governments. This financial dilemma resulted in unrestrained debt that stretched to serious amounts. Debt, in Europe, is at a point where there’ll either be a full-blown financial depression or where the government has to print more currencies for supporting the banks, and give rise to hyperinflation. Now, which one takes place is difficult to predict; it’s beyond your control and makes little difference to the common people. Either way, it’ll result in worst living standards for most of the developed, as well as developing nations.
There’s no simple answer to this issue since many individuals as well as nations have been living beyond their resources for several decades, building up an incredible amount of debt. For most of the countries in the world, the credit limit has already maxed out and the Gen Y can’t really afford all the entitlements that are in demand by the baby boomer generation. In America, you cannot continue living as if you have twice the income that you actually earn. Simply attempting to splurge money at the issue will just worsen the situation, since the nation and its government cannot afford to take on any more debt. Again, passing on the expenses of this economic depression to the upcoming generation is just not possible. It’s impossible for any future generation to pay this enormous amount of debt; nobody is so brainless that they’ll continue financing the risky debt at peculiarly low rates of interest.
If expenditure beyond income has not been sufficient, a lot of people in America were and are still gaming with your resources. They extract money out of your wallet and use it as security to optimize investments worth twenty times that amount. During the financial collapse of 2008, most of the gamblers lost the game. Whereas some financial organizations got bailed out, there are others who did not learn their lesson. Other big companies and fiscal institutions failed to pay off their debts on account of the huge economic downturn. Consequently, they either became bankrupt or were proclaimed “too-big-to-fail” by the government, which took on their debt and bailed them out in anticipation that the corporations and documents that they took over will pay them back someday.
The situation got so worse that most financial institutions will refuse to lend any further on commercial projects; they would rather prefer gambling on markets. After all, who would want to lend funds for financial development with no surety of getting refunded? Many other businesses that had the potential to expand will not, since they’re apprehensive of higher expenses in the future via government regulation and taxation. Unless and until everybody pledges to stay within their means, the scenario isn’t going to change much. Credit cards need to be kept under control, and the government should also remain alert to the federal expenses. Taking the right initiatives will surely help in eradicating the debt problems globally.
About the Author:
Rosamin Franklin is connected to the Debt Consolidation Care Community as a Moderator. She has been working with the community since 2007 and has offered several easy solutions to individuals with debt problems and various aspects of debt consolidation programs.
