Globonomics!

Consulting|Technology|International business

Cause of the slowdown in the US economy

with 5 comments

It is largely believed that the sub-prime lending sector is responsible for this slowdown in the US economy. I will post a comprehensive review on this to figure out what is going on out there in the West.

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Written by Naveen Athresh

April 17, 2007 at 4:28 pm

5 Responses

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  1. Hogwash.. relaxed credit and cheap money coupled with consumer greed and media glamorization of materialism as an identity. We are more interested in appearing rich with material trappings we can’t afford rather than building lasting wealth. It all started with Asprin.. The pop a pill problem gone is now…want a bigger house….get a loan and lie…

    alfred

    April 18, 2007 at 2:15 am

  2. Blogs That I Read

    […] I highly recommend that you check out this blog, I found it quite fascinating […]

  3. […] had said I would explain this concept a few months ago in an earlier post – https://ecofin.wordpress.com/2007/04/17/cause-of-the-slowdown-in-the-us-economy/ –  I have done so here. You will hear more from me on this very topic in the days/months to come […]

  4. […] had said I would explain this concept a few months ago in an earlier post – https://ecofin.wordpress.com/2007/04/17/cause-of-the-slowdown-in-the-us-economy/ –  I have done so here. You will hear more from me on this very topic in the days/months to come […]

  5. To, Institute for Organization Management
    U.S. Chamber of Commerce

    The USA should own a more productive economy. By focusing more on agriculture, since agriculture in the state is gradually yielding to the industry as the core of the economy. I have been studying us economy since few years, most of the economist fail to concentrate on certain areas which I have highlighted below, The state must concentrate on its motion picture, television film, and related entertainment industries, especially in Hollywood and Burbank.

    The economy of California plays a very significant role in United States. The state’s economy has a dominant force in the economy of US

    I Strongly believe US should adopt Mixed Economy, is such a type of economic system, where both capitalist economic norms as well as socialist economic norms exist. Both Private economic freedom and centralized planning co-exist

    In the US market economy, barriers are imposed on the formation of monopoly powers. But according to the Index of economic freedom, there are lesser restrictions in the countries like Hong Kong and Singapore.

    We shouldn’t be more pessimistic about recession as far as mortgage market is concerned; US economy is trillion dollor economy, with lot of reserves of gold and still continue to be, and standing on various other market trends,

    In a Command Economy or Planned Economy, the central or state government regulates various factors of production. In fact, the government is the final authority to take decisions regarding production, utilization of the finished industrial products and the allocation of the revenues earned from their distribution.

    The government-certified planners come second in the hierarchy. They distribute the works among the labor class, who actually undergo the toiling part of the entire process. China and former USSR and are perhaps two of the best instances of Command Economy. Though many countries now-a-days are switching off from Planned Economy to Market or Mixed Economy, yet nations like North Korea and Cuba are some countries where Planned Economy still exists in full form.

    In case of a Command Economy, both state-owned and private enterprises receive guidance and directives from the government regarding production capacity, volume, modes of production and course of their actions. Planned economic system is broadly segregated into two groups – Centralized and Decentralized. The centralized or centrally Planned Economy, as prevalent in former Soviet Union, is a more familiar concept between the two. The decentralized Command Economy, on the other hand, is more theoretical in nature with little or no application in the actual economic spheres,

    • By nature, a Command Economy is more stable, guaranteeing constant exploitation of the existing resources. It is least affected by financial downturns and inflations.
    • In a carefully planned Command Economic system, both surplus production and unemployment rates remain at a reasonable level
    • The steady nature of Planned Economy encourages investments in long-standing project-related infrastructures without any possibility of financial recessions.
    • Command Economy is just opposite to the concept of Market Economy, with respect to the basic money-making approaches. While Market Economy tends to multiply the wealth of a nation through the gradual process of evolution, Command Economic system prefers deliberate planning of the entire money-making process for better results. In fact, such sincere economic planning in the long run proves beneficial to improve the economic conditions of a country.
    • Command Economy emphasizes more on collective benefits, rather than the requirements of a single individual. Under such circumstances, rewards, wages and other monetary benefits like bonus are distributed on the basis of the joint rendering of services. This is how Planned Economy actually eradicates the profit-making at individual levels,

    However in the recent past focus on the various sectors of the economy, like the Chief industries include agriculture, tourism, apparel, electronics, telecommunication and entertainment has not been give much focus as compare to 1999-2000 and before. if we concentrate more on real estate we earn more revenue but only on short term, on long term we face the situation of recession in that particular sector, which will have severe negative impact than the positive.

    These points are in brief, however given an opportunity with monetary benefits, I would definitely be interested to share my points in future to contribute directly or indirectly,for upliftment of US economy.

    God Bless

    Kind Regards

    Vishnu Bhat
    Bangalore
    INDIA
    +919449984692

    Vishnu Bhat

    March 28, 2008 at 11:43 am


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