The planet is in financial turmoil. As crazy as it may seem, we are all in this together.
According to Kanaga Raja, global economic expert, the entire world economy is in the toilet. Raja said, "The downturn after four years of relatively fast growth is due to a number of factors: the global fallout from the financial crisis in the United States, the bursting of the housing bubbles in the US and in other large economies, soaring commodity prices, increasingly restrictive monetary policies in a number of countries, and stock market volatility.
"The fallout from the collapse of the US mortgage market and the reversal of the housing boom in various important countries has turned out to be more profound and persistent than expected in 2007 and beginning of 2008. As more and more evidence is gathered and as the lag effects are showing up, we are seeing more and more countries around the world being affected by this rather profound and persistent negative effects from the reversal of housing booms in various countries."
Basically, this will continue to get worse before it gets better. And yes, we'll be effected.
The Georgia Pacific plant in Acme is laying off 35 people immediately. There is not enough demand for drywall so the company has no choice. That's just one example of the ripple effect of this crisis.
The world’s financial firms have now lost over $2.8 trillion and global taxpayers have now spent around $8 trillion to shore up the world’s banks. These amounts will continue to climb as large businesses fail taking smaller ones with them.
On Monday, President-elect Barack Obama discussed items in his blueprint for turning around the economy - including a huge stimulus package and tax cuts for a "vast majority" of Americans paid for by the nation's "wealthiest."
The package will probably be around $600 billion. That's on top of the $700 billion package which Congress passed earlier.
Other countries around the globe are working to curb the recession as well. It seems every day the crisis is on the tip of the tongue when various leaders speak. And really, that's probably a good thing for us.
As bad as it is and as bad as it will get, it could be much worse.
We are all in the same boat, but what if we weren't? What if the price of oil had stayed where it was this summer? It would have had a catastrophic effect on the U.S. and our allies.
Had just a few countries entered into recession (with the U.S. being one of them), we'd be watching Russia, Iran, China and others gain power.
Russia has been flexing muscle of late and Iran has been trying to develop nuclear weapons for years. Had those countries not been apart of this economic disaster, think of those implications.
We are fortunate that our status as a Super Power and as the world's richest country that we have seemingly taken everyone down with us. As bad as it is now, I shudder to think of this world with us, Europe and Japan in an economic crisis while China, Russia, Iran and others are booming.
With this a world-wide problem, it is in the world's best interest for the United States to get back on solid footing economically. The reality of this whole thing is: as we go, so does the world.
Copyright Christopher Blackburn 2008