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World Economic Crisis

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Economics: Item 8 1.0 Introduction The recession Australia and many other countries face is a result of the greed that grows from the seeds of capitalism. It affects you and everyone you know, but what are you, your government and your country doing about it? The dire circumstances we are all in have prompted the government to hand out several stimulus packages with a hope that Australian jobs will be saved. 2.0 Main issues The current global economic crisis or 'Credit Crunch' as it has been coined has been believed to have started in mid 2007. Investors from around the world began to lose confidence in the American sales of mortgage loan contracts, triggering a fear in money lenders and banks alike, and an urge to create more returns was brought on. This was only the first step however; due to greed and overleveraged loans banks dealt out, a situation where people who really should not have received loans, did, this was an attempt for higher returns on the investors side (and in turn, more commission for everyone). In turn this resulted in serious instability in the housing market with people forgoing on their loans due to inability to pay, ...read more.


This statistic however, can be refuted with new reports that there is, in fact, positive growth in Australian employment with a boom of 27300 new jobs being filled versus the expected loss of 24400 [Smith, 2009]. With statistics like these it becomes obviously clear that the Australian economy is in good shape in comparison to other industrialized world leaders. Australian Central Banks interest rates being left at 3.0%, an expected rise in confidence is anticipated to occur [Reporter, 2009] in the near future. This is a positive sign for job growth in the future to come. As there will always be winners and losers when it comes to federal budget handouts, the concept that a stimulus package(s) can solve all economic problems is ludicrous to suggest. However with the evidence collated, an estimation of positive job growth, increased consumer confidence and a mending economy is not too far from reality. 4.0 The Next Step For the Australian economy to continue on being a stable exemplar to the rest of the world, a strong economical plan for the future will need to be created by the federal government. ...read more.


The growth of an industry like this would seek to improve economic confidence and increase the workforce within the industry. This could also enhance our exported goods with a possible market for Australian car overseas [Hamilton, 2009]. Political Acceptability: Environmental policies will be essential to future policy making for Australia with respect to confidence and jobs. The pro-environment policies inspire confidence in consumers through the belief that our budgetary spending can be used to better our own society. This is a perfect example of a very politically acceptable policy, and one which can be already seen in future development with the carbon emissions trading scheme [Taylor, 2009]. The ability to produce a positive policy that appeals to the public is the goal of political acceptability and one which is a fine balance of public opinions. Future ramifications of an expensive environmental plan could however, be an overwhelming drain on the economy. Once again it is a trade up between the two. 5.0 Conclusion The future remains grey for the world economic powers. While economic forecasters are predicting a recovery by 2010, nobody is really sure what the future holds. However during the present the goal is to preserve the working force of Australia and consolidate on our economic strengths. ?? ?? ?? ?? By John Baker ...read more.

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