YOYO-ISG 100718 The Age of Easy Credit and Its Aftermath

[Kooper]

Dear ISG members,

Please read the below article and write a summary or essay from it. Pick one to three words and provide their definitions and examples.

http://www.economist.com/node/16426084? ... d=16426084

[toshi]

Great one!
I was thinking about this problem as well.

[Kooper]

Great one!
I was thinking about this problem as well.

Hey Toshi,

You're welcomed to be our special guest as you please.

[toshi]

Great one!
I was thinking about this problem as well.

Hey Toshi,

You're welcomed to be our special guest as you please.

Thank you Kooper ^^

I guess you might feel interested in this one too:
The Third Depression by PAUL KRUGMAN June 27, 2010

[Kooper]

Here is my essay.


For the past few decades, the developed countries - both their private and public sectors – have been indulging in financial leverages; governments no longer feel they must treat budge deficits with caution, lavishing massive amounts of loans on future generations in the name of enhancing current generation’s well-being; using credit cards goes with the territory in modern societies; successful stories of daredevil speculators like George Soros exercising high-leverage investment strategies have emboldened many investors to follow suit.
There is however no such thing as a free lunch. The more degree of financial leverage that has ever been employed, the more degree of suffering the rich countries will experience the day they’re forced to de-leverage. The stark fact is - money doesn’t grow on trees. The extra economic growth created through spending borrowed money will later be counteracted by the dearth of consumption, Expenditures have to be cut down to pay the debts off. Borrowing more money can be an option only if lenders are willing to make a loan. Lately the sheer amounts of several countries’ record-breaking debts like Greece have started to fuel worries over defaulting. That makes more loans out of the question.
Let’s be blunt – all good things have come to an end. It is high time that Western countries went away with their extravagant lifestyles and tightened their belts. That will be harsh, but they have to bite the bullet.

[Kooper]

Here are Janet's essay and words.

Western countries borrow to enhance their lifestyle and use debt to enhance their return, but it may lead to a vicious circle if they can't pay off. In the future, they will have to face two problems. One is people will cut back their credit card spending. So there will be less money running in the market. The other is the government have to pay the debt they borrowed from abroad for the pensions and health care they promise to the citizens.

To solve these problems, first, we need to encourage birth to have more younger generation to support the aging population. Second, the governments need to rebalance the world's economy by encouraging the rich to spend more money.

Vocab:
1.prudent
2.leverage
3.foreclosing
4.appeasing