Essay on Comparison Italy vs Spain in Crisis

This article analyzes the underlying causes of the current crisis, estimates how bad the crisis is likely to be, and discusses the government economic policies pursued so far (by both the

Government help was seen as the only way to avoid a total economic collapse in the United States, although many thought it could result in a worldwide economic recession. On September 18, 2008 the 700 dollar bailout plan was proposed to congress. Fed Chairman Ben Bernake is quoted telling congress, “If we don’t do this, we may not have an economy on Monday” (The Housing Market Crash of 2007, 2011). This is when it became apparent that the government had a stake in this situation. When people begin questioning whether the United States economy will still exist, the government then has a huge role in the survival of not just the economy, but the entire country. The government is in a situation where it must decide how to protect the American economy, the citizens, the businesses, and the future of the United States of America. On October 3, 2008 congress passed “Emergency Economic Stablization Act” (H.R. 1424- 110th Congress, 2008) which led to the lending of 700 billion dollars’ to

May 1st, Puerto Rico had to default again on their debt. Now reaching $72 billion ("Everything You Need to Know..."), Puerto Rico is facing a serious problem. Congress is currently working on finding a solution to the problem, but they can’t agree. In this paper, Puerto Rico’s debt situation and the severity will be outlined while proposing solutions to help lessen the problem.

The debt crisis in Puerto Rico has consistently grown over the years, and has become a major talking point this year as Puerto Rico faces the possibility of defaulting on its loans. The condition of the economy and the growing debt has initiated talks of a bailout from the United States congress. There are several issues on dealing with Puerto Rico including its tax exemption, growing unemployment rate, and an exodus from the island to the main land. While many will argue that Puerto Rico’s issues should be solved within the island government, I believe that the United States should offer bankruptcy to alleviate Puerto Rico of its burden.

The government has to pass the bailout plan in order to free up banks and restore some liquidity back to the markets by taking on bad loans. The whole global financial

As the Obama administration 's early August debt-deadline continues to approach, it has become near impossible to ignore all the coverage and chatter about the looming U.S. debt crisis. Headlines have been dominated by the constantly shifting story, while those with interests in the stock market have been nervously monitoring their assets.

Gup (2003) brings out that financial trouble is a periodical concern that occurs to banks, industrial companies and other organizations. Gup begins his article by reviewing the history and importance of government bailouts for corporate failures. In his article on “What Does Too Big to Fail Mean?” he uses rhetoric questions in order to engage the readers in his analysis of government bailouts. For instance, he poses the question, “what should governments and government regulators do about it?” (Gup, 2003, p. 29). ‘It’ in this case referred to the periodical financial troubles of the above mentioned institutions. By using the question, Gup engages the reader in trying to think about what the government can do in cases where businesses face

Being unaware about issues on the other side of the world made me realize on intriguing economic debt crisis that is going on in countries that seem like they are holding together. Greece and the European was a great issue to discuss and view both sides before since I was unaware that there was a long going crisis going on in this side of the world. Greece can either get a so many bailouts repeatedly or they can fend for themselves to find how the country is able pay back the debt they owed the EU within the past years. In my opinion, I think that Greece should give the money from the EU to survive.

Venezuela’s crisis is directly related to a poor run government and mismanagement of the state-run-oil company. The government has pushed for anti-democratic actions and has repeatedly pressured banks and investors to stay away from the Maduro administration. The government needs to come together to solve issue, not pursue them, they are hurting their own country, socialism has caused an enormous negative impact with the current economic crisis. People in Venezuela are hungry and that in turn forces people to act in way they wouldn’t normally, so they can provide for their family.

Italy’s economy is a free-market economy. It is an industrial economy. The economy is mixed between privately owned and publicly owned industries.

bailout funding and with no recourse to private investors, suspend their debt repayments and also

The Eurozone is facing a serious sovereign debt crisis. Several Eurozone member countries have high, potentially unsustainable levels of public debt. Three—Greece, Ireland, and Portugal—have borrowed money from other European countries and the International Monetary Fund (IMF) in order to avoid default. With the largest public debt and one of the largest budget deficits in the Eurozone, Greece is at the centre of the crisis. The crisis is a continuing interest to Congress due to the strong economic and political ties between the United States and Europe.

The European sovereign debt crisis, which made it difficult or impossible for some countries in the euro area to repay or re-finance their government debt without the assistance of third parties (Haidar, Jamal Ibrahim, 2012), had already badly hurt the economies in “PIIGS”, Portugal, Ireland, Italy, Greece and Spain. This financial contagion continues to spread throughout the euro area, and becomes a dangerous threat not only to European economy, but also to global economy.

The debt problem for Spain, however, is not entirely only a problem for the government. In fact, most of the debt burden is on households, and non-financial corporations, which together with non-profit organizations (negligible) make up the total value of the private sector debt. We have already analyzed the reason why the household sector accumulated debt, mainly through the real estate crash after the crisis in the first section. On the other hand, the non-financial corporations, represent the local companies that are part of the export and import business, trade with foreign companies or access financing from larger financial banks. Together with the private and the public sectors, the financial corporations sector makes up the value of debt of total economy. Financial corporations consist of all resident corporations that are engaged in financial intermediation or in other auxiliary financial activities. The reason why I emphasize financial corporations is because, although there has been a great amount of debt burden associated with households and especially with non-financial corporations, the financial corporations sector is the one with the highest debt from Spain’s total economy. This can be seen in Figure 6, where the private sector debt is shown in comparison to the public sector debt. After 2000, the private sector started increasing at unprecedented levels reaching its peak (200% of GDP) in 2009. This is almost three times bigger than the public debt.

What is the European Debt Crisis? The European Debt Crisis is the failure of the Euro, a currency that ties seventeen European countries together. In this paper, I will be describing the cause and effect of the debt crisis along with what would happen if the European Union stayed with the economy they have. Then what I believe is the best solution to fixing the debt crisis.