Debt - Hide it under the rug.
Written by ...
Tuesday, 30 September 2008
The good old US of A have found a
way in which they will attempt to burrow themselves out of a
depressingly downward-spiralling economy. "Great!" You say. And
great it may turn out to be. From an early perspective, however,
things may not be looking too fantastic. The plan is that the US
Government will spend about US$700b buying depreciating mortgage
related assets from struggling financial institutions in the hope
that the economy will strengthen. Sound like a bunch of gibberish.
Effectively the government is bailing out the nation by borrowing
more money. The idea is that this will solidify the economy in the
short time, but surely borrowing more money to fill a hole created by
a lack of money is a pretty sketchy tightrope to be walking. Who are
we kidding...If any country knows how to avoid crippling debt, it's
the US. Oh wait, they already owe about ten trillion. Historically,
the NZ economy has (to an extent) followed that of our rib-eating
friends across the Pacific, and we are now stuck firmly in the mud
with our own economic wobbles. Let's just hope our nation's
solution is slightly more economically viable in the long term.
