Western economies have spent their way into oblivion

Discussion in 'Economics' started by Grandluxe, Oct 19, 2011.

  1. ......is at risk from a fundamental crisis in the world economy and “time is running out” to solve it, the Governor of the Bank of England has said.

    9:31PM BST 18 Oct 2011

    Unless overspending by Western economies was curbed it would bring about an ever-larger debt crisis that would mean much lower long-term growth rates, he said.

    Worse, he suggested, some of the measures being deployed to counter the short-term situation could actually exacerbate fundamental economic problems, worsening the debt crisis and leaving taxpayers footing an even larger bill.

    That spending was made possible because fast-growing emerging economies such as China spent much less than they earned, then used their surpluses to lend to the West.

    The root cause of the debt crisis threatening major Western economies was a long period of “unsustainably high levels of consumption”, in which governments, companies and individuals spent more than they earned, the governor said.

    All of the emergency stimulus measures employed to support European banks and the eurozone had simply “bought time” for world leaders to address that fundamental imbalance, Sir Mervyn said in a speech in Liverpool last night.

    read more:

    USA, you want to follow failed policies? Go ahead.

    Say byebye to universal healthcare, jobless benefits, Europe.
  2. Humpy


    The Western economies are going to get a rough shake-up as time progresses.
    For decades western businesses have been overpaying themselves. The bric countries have a relatively easy path walking on the corpses of dead and dying Western companies.