What steps are needed for global economic recovery?

In summary, there are various ongoing discussions about the state of the US economy. However, it is also important to observe the economies of other countries, such as Iceland and Pakistan, which are facing their own unique challenges. The recent economic downturn has also affected colleges and young people, highlighting the need for solutions to help the US and global economies recover. Some solutions suggested include finding alternative sources of energy and reducing oil consumption. Additionally, the issue of overfishing has been raised, as it not only poses a threat to the environment but also to the economies of countries that rely on the fishing industry. Overall, it is important to consider the impact of our actions on both the economy and the environment.
  • #1
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There are threads about 'What's wrong with the US economy", but I thought it would be interesting and worthwhile to look at what's going on with various economies around the world.

For example - Iceland's economy crashed.
. . . .
Until last spring, Iceland’s economy seemed white-hot. It had the fourth-highest gross domestic product per capita in the world. Unemployment hovered between 0 and 1 percent (while forecasts for next spring are as high as 10 percent). A 2007 United Nations report measuring life expectancy, real per-capita income and educational levels identified Iceland as the world’s best country in which to live.

Emboldened by the strong krona, once-frugal Icelanders took regular shopping weekends in Europe, bought fancy cars and built bigger houses paid for with low-interest loans in foreign currencies.

Like the Vikings of old, Icelandic bankers were roaming the world and aggressively seizing business, pumping debt into a soufflé of a system. The banks are the ones that cannot repay tens of billions of dollars in foreign debt, and “they’re the ones who ruined our reputation,” said Adalheidur Hedinsdottir, who runs a small chain of coffee shops called Kaffitar and sells coffee wholesale to stores.

There was so much work, employers had to import workers from abroad. Ms. Nordfjord, the architect, worked so much overtime last year that she doubled her salary. She was featured on a Swedish radio program as an expert on Iceland’s extraordinary building boom.

Two months ago, her company canceled all overtime. Two weeks ago, it acknowledged that work was slowing. But it promised that there would be enough to last through next summer.

The next day, everyone was herded into a conference room and fired.
. . . .
How they recover will be interesting to follow.

Similarly Pakistan's economy is in dire straits, and it is a risk for crashing, a situation which is complicated by the presence of al Qaida and Taliban in the regions on the border of Pakistan and Afghanistan.

Meanwhile -

Tough Times Strain Colleges Rich and Poor

Working Poor and Young Hit Hard in Downturn

Beyond the recent bailout - what steps are needed for the US and global economies to recover?

Rather than rehash the problems - what are the solutions?
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  • #2
It does look like the entire Icelandic economy was a ponzi scheme.
They had artificially high interest rates - which attracted lots of online savings accounts from europe the banks then used that money to invest in some 'interesting' mortgage deals.
Their government was basically taking the view that the losses of a bunch of international banks that happened to operate out of iceland is nothing to do with them - and since some estimates had the losses at several $100K per head of population there's not a lot they can do.

There has been a big row in the UK over this. Although private savers are covered by the UK (because the icelandic banks needed to register in the UK) a lot of univerisities, charities and city councils had £100Ms in current accounts with icelandic banks which isn't covered.

So the UK government used anti-terrorism laws introduced to freeze terrorist funding to sieze the assets of the icelandic banks - which wasn't exactly popular in Reykjavík.

Of course last time Iceland had a crisis after cutting down all the trees it needed to build ships - they went west looking for some new land. So the population of Newfoundland should watch out.
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  • #3
mgb_phys said:
Of course last time Iceland had a crisis after cutting down all the trees it needed tobuild ships - they went west looking for some new land. So the population of Newfoundland should watch out.

Or maybe they'll sail southeast and England will have to deal with Vikings again! :eek:

But perhaps very civilized Vikings. When I was in grad school, I saw a cartoon from a Danish newspaper or magazine on the door of a professor in the Germanic Languages department. It showed a bunch of Vikings standing on a sinking ship, with one of them saying, "Jeg vil foreslå, at vi nedsætter et udvalg." ("I move that we name a committee.")
  • #5
jtbell said:
But perhaps very civilized Vikings... It showed a bunch of Vikings standing on a sinking ship, with one of them saying, "Jeg vil foreslå, at vi nedsætter et udvalg." ("I move that we name a committee.")
I asked a Norwegian colleague how they went from maurading vikings to peaceful Volvo drivers.
He thought it was natural selection - the half of the population that went 'Yeah rape and pillage' all got on boats and ended up in Ireland, Scotland and Northern England.
Those who stood back and said 'have we thought through the implications of this policy?' all stayed behind in Scandinavia. A sort of national Maxwell's demon!
  • #7
The problem with that is to get a bailout for it's banks it will probably have to join the EU which means it can no longer claim it's 200mile exclusive fishing grounds.

Even if it doesn't - it has managed to keep a working fishing industry by carefully managing fish stocks. If it suddenly decides to massively increase the catch it's going to quickly be in the same boat as Eastern Canda, the UK and every other cod fishery in the North Atlantic.
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  • #8
My perspective is largely energy-concerned.

The ocean is a toxic garbage bin; the pollution is killing sea life. Half a million tons of hydrocarbons are dumped in the Mediterranean every year, sometimes intentionally. Tremendous waste of resources for crap, junk bought and sold at yard sales to adorn a meaningless lifestyle. Folks drive around, burning gas so they can aimlessly travel just to get out. They sit in front of the tube at night, watching sitcoms or Fox News and drinking beer.

Yet, in this waste-drenched economy, I'm doing just fine. I could afford $10 a gallon and still get by. I'm not spending my money on DVDs or CDs or PS3s. I actually get out and walk every day. I'm not putting my money into a 401k for some corporate face to spend on yet more expensive crap and hope that there's a decent return when I most need it. I'm putting it into real estate, to rent out homes and property, and other investments I can see and tender myself.

The picture of our future, a lack of oil to send our cruise ships and for companies to make those Happy Meal toys or weapons or iPhones, doesn't look so gloomy to me. Sure, it would suck for pharmaceuticals and metals, like what needles diabetics would need, for example. On the other hand, the cards have been laid out on the table, and people have chosen what to do with their resources. Is expensive oil such a bad thing? Wouldn't that push people to higher efficiency? I know the Earth would appreciate it.

Is there any indication that the world would still fair okay with how our lifestyles are affecting the environment, should we find solutions to the energy crisis and gloomy financial calendars? Because the way things are right now, I'm not too impressed with how our species is handling its affairs. It looks to me that the problems will be corrected one way or another.

Unless we manage our resources efficiently and do what matters most in life, we will own the consequences of those decisions. We can't have it all. We can't hope that technology advances and will, soon, keep our lifestyles going.

Related to What steps are needed for global economic recovery?

What is global economic recovery?

Global economic recovery refers to the process of improving and stabilizing the overall economic conditions of countries around the world after a period of economic decline or recession. This can include measures to stimulate economic growth, reduce unemployment, and restore consumer and investor confidence.

Why is global economic recovery important?

Global economic recovery is important because a strong and stable economy is crucial for the well-being of individuals, businesses, and nations as a whole. A healthy economy can provide job opportunities, increase standards of living, and promote international trade and cooperation.

What factors can impact global economic recovery?

There are many factors that can influence global economic recovery, including government policies, trade agreements, natural disasters, global pandemics, and geopolitical tensions. Changes in consumer behavior, technological advancements, and shifts in global supply and demand can also have a significant impact.

How long does global economic recovery usually take?

The duration of global economic recovery varies depending on the severity and complexity of the economic crisis. Some recoveries can happen relatively quickly, within a few years, while others can take decades. It also depends on the effectiveness of government policies and international cooperation.

What are some challenges to achieving global economic recovery?

There are several challenges that can hinder global economic recovery, such as high levels of debt, unemployment, income inequality, and political instability. Other obstacles may include inadequate infrastructure, corruption, and lack of access to resources and opportunities for developing countries.

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