Link: http://ctv2.theglobeandmail.com/servlet/story/RTGAM.20090426.wstimulus0426/business/Business/businessBN/ctv-business
Summary
Recently, economic leaders from the world's richest nations, known as G20, gathered for a weekend meeting of the IMF (International Monetary Fund) and the World Bank. The meeting had brought up a stimulus package which is expected to meet their pledge to spend the equivalent of two percent of their GDP. $820-billion USD has been spent on these stimulus programs by members of the Group of 20 major economies in hopes of returning the economy to it's previous state.
Relationship
To regain economic stabilization, members from G20 has imposed a stimulus package, also known as economic stabilization programs. The purpose of devoloping this package is to stimulate spending. Referring back to chapter 6, when spending increases, the overal cash flow increases and employment rate increases. Therefore, more jobs will be created and chances of unemployment decreases. If everything goes well, we'll have a recovery in th first trimester of 2010. It is predicted that G20's fiscal assualt on the financial crisis will amount to "5.5 percent of of GDP this year and next." However, if the stimulus package fails to achieve it's goal of restabilizing our economy, we may face public debt that will definately affect current and future generations. Referring to Chapter 8, a public debt is simply the the total of the nation's debt: debts of local and state and national governments. Depending on how much debt is payed off, our current generation will be the ones to pay off these debts. These debts will ultimately be paid through our taxes.
Conclusion
Judging by the confidenct from the members of G20, I believe our economy will return to it's previous state. Other contributions such as the Olympics will definately help our economy by creating new jobs and increasing the cash flow. However, if I am wrong, there will surely be a public debt that will affect our current and future generations.
Sunday, April 26, 2009
Wednesday, April 15, 2009
Retailers' pain in the cards
Link: http://www.vancouversun.com/business/fp/story.html?id=1393636
Summary
The recently announced news of probing credit and debit card fees from the Senate and Commons committe has brought the smiles back into small businesses. Consumers and retailers do not have to pay the increasingly high fee for their credit and debit cards. Also, businesses do not have to worry about the additional fees that comes along with it. Hence, the probing of credit and debit card fees will defininately relieve businesses of their financial issues and increase spending.
Relationship
Due to the popularity and the convience of credit and debit cards, it is reasonable that companies choose to use this method of payment more often than others. Though, this method of payment had a cost; consumers and businesses are required to pay interest and other additional fees. Now that the economy is in recession, prices are being increased and credit card interest rate shot up from 1.9% to 2.4%. This increase in interest is bad for economy as we learned in chapter 7. With economy already in recession, due to decrease in spending, having high interest rates will just add on to the problem. Not only will consumers stop spending, unemployment rates will increase. Businesses are already dealing with severe financial issues because they cannot generate enough money. Ultimately, banks will go bankrupt because businesses will not have the money to pay back loans.
Conclusion
Right now, I believe that we are heading the right direction with the decision of probing credit and debit card fees. This new system will definitately attract more businesses and consumers to spend. They no long will have to worry about interest rates and other additional fees when purchasing goods. Eventually, this will achieve stable businesses and increase in employment. An example would be car dealershops. Already, consumers are somewhat benefiting from the recession as interest rates for cars are lower; we no longer have to pay credit card fees to banks.
Summary
The recently announced news of probing credit and debit card fees from the Senate and Commons committe has brought the smiles back into small businesses. Consumers and retailers do not have to pay the increasingly high fee for their credit and debit cards. Also, businesses do not have to worry about the additional fees that comes along with it. Hence, the probing of credit and debit card fees will defininately relieve businesses of their financial issues and increase spending.
Relationship
Due to the popularity and the convience of credit and debit cards, it is reasonable that companies choose to use this method of payment more often than others. Though, this method of payment had a cost; consumers and businesses are required to pay interest and other additional fees. Now that the economy is in recession, prices are being increased and credit card interest rate shot up from 1.9% to 2.4%. This increase in interest is bad for economy as we learned in chapter 7. With economy already in recession, due to decrease in spending, having high interest rates will just add on to the problem. Not only will consumers stop spending, unemployment rates will increase. Businesses are already dealing with severe financial issues because they cannot generate enough money. Ultimately, banks will go bankrupt because businesses will not have the money to pay back loans.
Conclusion
Right now, I believe that we are heading the right direction with the decision of probing credit and debit card fees. This new system will definitately attract more businesses and consumers to spend. They no long will have to worry about interest rates and other additional fees when purchasing goods. Eventually, this will achieve stable businesses and increase in employment. An example would be car dealershops. Already, consumers are somewhat benefiting from the recession as interest rates for cars are lower; we no longer have to pay credit card fees to banks.
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