Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and beginning April 20th, 2021 (Eastern Time) the Yahoo Answers website will be in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.
Trending News
Okay, Politics aside, How do we get out of this economic crisis and jump start the economy?
I think that the credit and mortgage crisis is the root cause and also the solution to our economic mess. Any suggestions that we as Americans should make to get out of this mess and at the same time keep from getting into this mess in the first place? Serious comments only.
What if Americans were given a chance to catch up on their debts, pay down their debts and catch up on their mortgages without interest penalties and fees? Then maybe we should be guided by our employers and the government to create some incentive to set up a rainy day fund for ourselves since we can't seem to do it ourselves. Any other suggestions?
Froggy, you bring up an interesting point! The Bush stimulus packages were mistakes!
Agreed Meg and Randall! You are right Meg in that healthcare is counterproductive to American business. It has to be fixed! I agree with you as well Randall in that the markets themselves should be allowed to dictate, but at the same time at this point , our economy was headed for a deep Recession or even a Depression, which is why the Feds felt they had to act!
Meg, you are right about deregulation. We have experienced it time and time again with the Savings and Loan bailout. the Junk bond scandal the Enron scandal etc!
A major part of our problem is that pay rates have not kept up with the cost of living and manufacturing and other jobs have been resourced overseas.
4 Answers
- megLv 71 decade agoFavorite Answer
Too much of our economic growth since 2001 recession has been investment in residential housing, government and consumer spending, and too little in business investment. This imbalance is at the heart of the housing bubble, and to fix the economy we will need policies that change this. We need to take step to bring the budget into balance and cut spending as well as ending the policy of borrowing to finance tax cuts. We should also end policies that encourage people to by homes as an investment. Low interest rate are a given during a recession, and we will need to continue to have programs and policies to stabilize the banking system. Reforming how we pay for health care would probably help business competitiveness of our exports Industries more than an other government policy because it is a large burden on our companies relative to other nations. We will eventually need to figure out how to regulate the financial industries to prevent excess risk taking, but that can wait because the problem is now that they are too cautious.
- Anonymous1 decade ago
Easy - Bernanke needs to become Volcker, we must suck up all that extra, artificial liquidity, let the corrections happen because they have to (that's why they're called corrections) and then start over.
It's not a question of an imbalanced investment of real capital.
It's a question of the Fed dramatically increasing the money supply through low rates after 9/11.
That's why the poster above me correctly points out that the malinvestment took place since 2001. It's been a credit bubble. Those are caused by the central bank, not the market.
- Anonymous1 decade ago
WAIT. and not let the fed lower rates so low again (in early 2000's) thats exactly why there's a credit crisis, which is why there's an economic downturn. The fed was allowed to do whatever they wanted to stop a recession back then, and it caused one for right now.
- 1 decade ago
I don't think it's possible to "jump-start" the economy. For the most part, it seems whenever we try to do that, we make things worse in the long-run. Since even economists don't really know the details of how the economy works, I think the best advice is to keep our hands off of it.
