USA ECONOMIC CRISIS

USA Economic Crisis

USA Economic Crisis

Introduction

The global financial crisis is one of the biggest issues that concern humanity since last few years. This disaster has touched virtually every country. Reduced profits, loss of jobs, rising prices, delayed wages, stipends, pensions and unemployment. People are just in a panic. The word "crisis" sounds throughout the newspapers. The newspapers comprises of shocking notes that some businessman committed suicide because he could not feed his family. Unfortunately such cases are rare.

2008 financial crisis characterized by deterioration of the main economic indicators, in almost all countries of the world. The mortgage crisis in the United States appeared in 2006, which impact on the entire world countries. Then the reduction in the sale of real estate's (houses), along with this, issue has developed into a credit crisis in 2007. Credit for virtually any product can get anyone (Claessens, et al, 2010, Pp. 267).

Discussion

Global Crisis Role of the Nation State

The current international economic turmoil represents one of the most destructive economic crises in the last century, perhaps more devastating than ever. General international economic system, nearly all national economies, and especially vulnerable transition economies of Southeast Europe affected. Clearly, small and medium-sized companies particularly affected by market turbulence and its position are clearly representing the adverse economic circumstances of the newly created world. The problems reflected in a reduction demand, poor access to export markets and in capital markets that reserved for recovery of the economies that have caused the current economic crisis (Menon & Chongvilaivan, 2011, Pp. 107).

By analyzing the effects of global economic crisis, it is crystal clear that many countries were out of funds to run daily operation. Countries have to pull out funds from numerous ongoing or future projects to sustain the crisis that is where PPP and PFI needed. Using these approaches countries could continue their ongoing projects as well as can run manage their operating expenses. When in 2008, the crisis appears, many countries had borrowed money from supra national funding agencies like EU, IMF and others (Mohsen, et al., 2011, Pp. 101).

The crisis which has not, only collapsed many financial sectors, but many European countries were at the verge of bankruptcy, among them Latvia, Hungary and Ukraine are at the top. These countries have obtained a loan from EU and IMF, to maintain their reserves; especially Ukraine was out of foreign reserves and to overcome this shortage several strategies adopted. Beside theses three countries, economies of Portugal, Greece, Italy, Ireland and Spain were also facing crisis. Hungary is also in the list of loan taker of IMF in the financial crisis as its currency has lost 25% against US$, Swiss Franc and Euro. In Hungary, more than two third of its consumer credit are in Swiss Francs and the number of obtained loans, and mortgages since December, 2008 has reportedly increased (Mohsen, Abdulla, et al., 2011, Pp. 101).

In order to resolve this problem, the monetary authorities and governments took a number of policy measures to prevent the ...