Essays on government bailout


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Credit crisis usually comes with cyclical purging of excesses. When the whole industry is booming, prices are growing fast and profits are huge. Thus the investments are growing faster than the market itself.

When the crisis comes, many products cannot be sold out, and prices fall sharply, the whole market is tighten, the relationship between borrower and lender is broken. There are also some special kinds of credit crisis like the one happened in Britain in is caused by poor harvest.

However, after World War II, since the government strengthen the intervention in market by monetary and fiscal policies, such as increasing money supply, lowering interest, and so on, the reason why credit crisis happen becomes more complex. Anonymous, The global financial crisis of September-October is a major ongoing financial crisis, the worst of its kind since the Great Depression. It became prominently visible in September, with the failure, merger or conservatorship of several large United States-based financial firms.

More importantly, on grass root level, thousands of schools are lacking very basic facilities such of sanitation, water, electricity, boundary walls etc. The public hospitals depict bleak pictures where we find lack of proper medicines, beds, equipment and etc. Due to absence of basic health facilities, women die from pregnancy for every , births. For every 1, babies born, 66 die before their first birthday. In addition, approximately 44 percent children in Pakistan are stunted.

Every day, due to malnutrition and poverty children are dying in Pakistan which further increase the current economic crisis. When the population increases, it directly effects the consumption of that particular country this effect decreases the GDP and GNP of that particular country and also increases the imports.

More population guarantees more consumption. This leads to misuse or overuse of natural resources. Increase in population growth leads to decrease in man to land ratio. In the result, land become inelastic and one cannot increase the amount or supply of land. All these effects are negative symptoms for the economy and economic development. Low Tax to GDP ratio has always been a problem for economic development and one major explanation of high budget deficits in Pakistan.

In the present study, an attempt is made to analyze empirically the determinants of low tax revenue in Pakistan by employing time- series econometric techniques over the period This study investigates whether economic policies, external variables and social indicators along with elements of tax base can account for part of the variation in the tax revenue performance in Pakistan.

The empirical results suggest that openness, broad money, external debt, foreign aid and political stability are the significant determinants of tax efforts in Pakistan with expected signs. The results also indicates that the determinants of low tax revenue in Pakistan are narrow tax base, more dependence on agriculture sector, foreign aid and low level of literacy rates which powers the economic crisis of the country.

No doubt, mechanization of agriculture is increasing in Pakistan, but in most of the areas, the old implements are still being used for agricultural production. Old and orthodox techniques of production cannot increase the production according to international levels. Numbers of fertilizer producing units are just 10 in Pakistan.

Shortage of irrigation facilities causes a serious limitation in the expansion of crop area in Pakistan. The lower water supplies, loses from water course in the fields are the serious problems of farm sector. Actual surface water availability is The average crop yield in Pakistan is very low as compared to the production levels of the advanced countries of the world.

Land reforms have been implemented against the will of people.

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There is an urgent need to conduct a proper land reform for improving agricultural growth. Due to this problem agricultural production cannot increase to desired level which directly affect our economy as Pakistan is an agro-based economy. Then manufacturing contributed 7. In Pakistan Markets were not well-developed which implied that savings were not channeled into most productive uses.

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Take-off does not materialize into sustained growth due to poor quality of investments, Due to poor resource mobilization, there is continuous reliance on foreign resources, Existing framework does not indigenize elements such as innovation, creativity and learning. Pakistan — despite being an agricultural state — has little to offer to the agriculture sector. Although agriculture accounts for half of the employed labour force of the country and is the largest source of foreign exchange earnings, it contributes only 24 percent to national GDP, according to Pakistan Bureau of Statistics.

The reasons for a low GDP contribution are known to most. The artificial price hikes and the plight of farmers are also not new. Ever since the inception of this country, farmers have been exploited at the hands of the feudal lords and middlemen. Since s, the mounting debts and debt payment service of Pakistan due focus and consideration from the Policy makers and economists. The effect of external debt overhauling on the development and growth of Pakistan's economy. To hunt the target of research, five variables i. Growth, external debt servicing, saving, net export, Foreign Direct Investment were taken to focus their fact association with the GDP or development of the Pakistan's economy.

Exports is basically good to helping hand for economy so they must be lifted up.

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The impact of external debt is quite hostile on growth so steps must be taken to abolish it in order to growth of economy. The Economic Survey of Pakistan has already revealed that the government failed to achieve multiple economic targets, such as manufacturing, electricity generation and agriculture. Efforts made to raise the economy of Pakistan: The s: era of economic growth Amidst massive inflow of American aid, political stability enabled Pakistan to sustain high rates of growth in the s. They are paying only so that someone else can receive.

Some may think that my analysis is a harsh overreaction to these current events. These actions should absolutely and consistently land the perpetrator s in jail.

There are only two economic systems in the world, and all economic philosophies fall into one of these two systems. From the first European settlements on this continent to the present day, there has been an ongoing battle between the proponents of these two economic systems. Unfortunately, the last century has forced America to endure a long, painful slide into full-blown socialism.

Socialism is characterized and defined by either of two qualities: Government ownership or control of capital, or forced pooling and redistribution of wealth. Either of these situations indicates the presence of socialism, and by logical extension, the absence of a free market. Socialism is ethically wrong because it cannot exist without the forced sharing of resources. Similarly, government cannot redistribute resources without taking these resources away from their owners. Since socialism cannot exist in the absence of theft, it is somewhat redundant to have socialism as a separate point on this list, but I have done so because it is important to understand both the small picture of theft and the bigger picture of socialism as both apply to public policy.

Our federal government is not content to just regulate the markets capital , but is also taking the next step of purchasing ownership interest in previously private companies. We need to remember that our founders created a Constitution of enumerated powers—that is, a document that limited our federal government to only those actions expressly listed in the document. Congress and therefore the federal government has no authorization to pursue any other actions. With this in mind, we should ask ourselves where these bailout powers are enumerated in the Constitution.

The answer, of course, is that these powers are nowhere granted to our federal government. According to our politicians and media, some businesses are so big that the potential consequences of their failure would be so widespread that the government must act to prevent such a failure. Even if we ignore the fact that it was unconstitutional meddling in the economy that caused these problems in the first place, we cannot ignore the obvious conclusion that our government is committing an ethical and constitutional crime—and then justifying it with a pragmatic argument.

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He is either innocent or guilty of the crime, regardless of the pragmatic benefits of his action. Unfortunately, the only difference between the run-of-the-mill bank robber and our political leaders is that one has a mask and the other has a nice office and a government pension. A pragmatic argument for any action should never trump the consideration of ethics.

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All decision-making should first ask if the action being considered would violate any ethical or moral standard. Pragmatic considerations should come into play only after we determine that the considered action passes ethical muster. Unfortunately, we often place the cart of pragmatism before the horse of principle. This is a violation of justice, and no society can long survive if it neglects an unwavering dedication to ethics. The evils that I have described above inconsistency, theft, socialism, violation of the Constitution, and pragmatism manifest themselves in many of our government policies—not just in the current bailout debacle.

So, what should we do? First, we must study these principles and learn to apply them to all aspects of government policy. Second, we must go beyond cursing the darkness—we must begin to light the candles of truth and good government.

We must educate our friends, family, and neighbors in these truths, and then further, we must demand that our elected officials govern by these principles. If our elected representatives fail to follow these principles, we must work tirelessly to replace them in the next election. Only by these actions can we preserve our liberty and restore our standard of living. There are several things that every American needs to know about these events First, the sub-prime mortgage collapse is primarily—if not exclusively—a result of government fiscal policies and Federal Reserve Bank monetary policies that created loose credit and cheap money.

Principle 1: Inconsistency Inconsistency is always and everywhere the fruit of relativism.

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