human cost of economic meltdown and its alternative
The New York Times editorial calls this "the scariest
economic free fall the world has seen since 1929,"
referring to the Great Depression that caused great suffering
to millions. The sentiment is echoed by hundreds of leading
economists, bankers and traders whose opinions are quoted
they struggle to explain the economic fallout to the general
public. Yet no one is able to confidently predict our economic
The US government
first bailed out and then, following the lead set by Britain,
France, Italy and Spain, began taking over some of the largest
financial institutions. How many billions and trillions
do they have? Of course the answer is that they already
have more than 10 trillion dollars in national debt!
The human costs
of this economic meltdown are only beginning to be felt.
More than a million citizens have lost their homes in the
past two years, and a million more are expected to lose
their homes in the coming 12 months. Yet the United States
government continues to pay more of the mortgage costs of
rich homeowners, through larger tax deductions, than of
citizens have lost two trillion dollars in retirement funds,
representing about 20 percent of their value since last
year, reducing the income of everyone and forcing many older
working citizens to continue working even into their late
sixties. Countless small investors are losing their savings.
The frozen credit
market, which is much more serious than the severe stock
market declines, will cause companies around the world,
unable to borrow, to layoff workers and unemployment will
The Russian stock
market fell by about two-thirds since May. Thus, the global
financial crisis has wiped out roughly a trillion dollars
in wealth across the country.
The country of
Iceland itself is failing. Prime Minister Geir Haarde warned
of the threat of "national bankruptcy." The government
seized its three largest banks to prevent their failure,
and the currency had already lost half its value before
its trade was halted. The country is desperately seeking
an emergency loan from Russia or from the International
Monetary Fund (IMF). However accepting the IMF harsh structural
adjustment policies to restore fiscal and monetary stability
will hurt everyone, an extraordinary reversal for the island's
economy which has been quite affluent for the last decade.