There has been a chorus of liberals economists who blame everything from excessive borrowing to cheap loans that triggered it in the first place to the political system that allowed this to happen. Not many have looked into the causes of low saving rates in western countries i.e. US/EU. There are many Points that one must ponder over..
1. They are all liberal free enterprise systems
2. EU has some form of state ownership & spends considerably more on welfare/Doles & aging population is not earning enough to sustain the spends
3. Political pressure or oversight led to easing of norms to land to unscrupulous & low credit worthy consumers in US.
4. Banks converted this debt into securities and sold them to other banks on bond market
All these no doubt are important but obvious causes.
Its time we start looking at basic unit of economic activity - Family
2. Its mostly the immigrant population that is growing
3. More and more children are being born out of wedlocks
4. High divorce rates
5. late marriages or no marriages
With less and less working population to sustain an ageing population and their health care needs how is western civilisation or lack of it going to ever pay this back?
The current debt ceiling issue in USA is nothing unusual and has happened dozens of times in past but rest assured it will only increase in magnitude in EU zone. USA still has ongoing migration that brings fresher ideas/ innovation and knowledge to create further wealth. EU attracts largely Arabs/Africans from muslim countries with poor education who feed on the welfare system only. Where does this lead us in the end?
We must look into future and see..
Hypothesis 1 : Older citizens,have less incentive to repay debt - another prosaic fact now having global reverberations. As the number of older voters relative to younger ones increases around the globe,the creditworthiness of borrowing countries could decline - resulting in less external lending and more soverign debt defaults.
Hypothesis 2: The basis of current economic crisis in Europe/US (western Civilisation) rests on destruction of family system by liberals. family is the smallest economic unit simply because of human desire to leave legacy,Inheritance, savings for progeny.
Singles rarely save in western economies as basic needs are taken care of leading to no Savings capital for investment. As a result economies must continously raise debt - Current US crisis now %17 Tn , tomorrow could be $20 or $30Tn. The current global economic model transacting in US dollors or Euro allows them to print without any basis thus exporting inflation to other countries.
Hypothesis 3 : The destruction of western economies will revive the family system and more & more women moving out of workforce to raise children, seeking security in marriage. There will rise in more conservative values with deep divide with liberals i.e. Dems in US & labour in UK with republicans & Conservatives respectively. BJP & Congress socialist cosy club of dole giving parties in India.
In order to remove the debt fixation of western civilisation, Asia/Africa must force them to change habits and this can be done through the following ..
1. Get into more and more regional trade agreements and conduct trade in their own currencies and not in Dollar/ Euro denomination.
2. Muscle up as West will not easily let go of their currency privileges
3. Reduce regional conflicts so that you don't get played
4. Dont go to IMF/World bank
a. Live within your means or invest through your savings
b. get out of costly welfare, restrict it to education and healthcare
c. Lend within your regional groupings
5. Give more and more incentives to families and stop incentivising bad social behaviour i.e. Single parents etc.
Citizens too must do their part.
1. Reduce credit card purchases as you don't realise the amount of money you spend while swiping
2. Always pay in cash as you count while making payments thus making you realsie the amount spent
3. Get married and raise a family
4. First fix saving amount per month, then spend the rest not other way round
5. Invest in land & Gold
6. Dont buy things that you don't need or you ail land up selling what you cherish.
7. Maintain a house in Village for retirement
8. Start investing from first salary
9. family comes first, one of the spouse must make sacrifice & respect each other.
