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This book is mainly concerned with the economic crisis that is currently impacting the United States and other countries around the world. The author contends that the United States and other Western countries have yet to recover from the economic disaster that struck them in 2008. Furthermore, the persistent problem has harmed most countries' Gross Domestic Product (GDP), causing it to fall below the usual level. However, this has had a negative effect on the economy, raising the number of unemployed people by a larger proportion. The youth are the most affected by the unemployment crisis, with nearly half of them unemployed.
Therefore, all the affected states, more specifically the United States, have to put recovery measures on the ground so that they are able to move out of this calamity. The states should come back to their original economical positions so that this current situation cannot lead to the rise of other unsolvable issues. They should therefore focus on the short term solutions rather than managing to recover in the long term problem, because they are actually in a depression. This is one of the solutions that the author gives after raising the question on what should be done now that the problem was at hand. Moreover, the United States should focus on the formation of policies that would enable create more job opportunities for the currently high unemployed population.
The author, Paul Krugman, in his book, “End The Depression Now” has talked about a number of things, but his main argument focused on the economic crisis facing the United States and basically some European countries like Spain and Greece. This paper will therefore focus on analyzing the five points discussed in the book before conducting another breakdown on two more books, which have related ideas to Krugman’s.
Analysis of Key Point by Krugman
Why the Rich are getting more Richer
The United States has suffered this problem, where those who have already reached the maximum level of being rich are still grabbing more wealth while others continue suffering. Before and even after the crisis hit the United States, a smaller percentage of individuals have continued to earn larger incomes while a larger percentage which is working is earning relatively low income. The aspect of education can be employed here where you find those possessing bachelor’s degree earning more than those with the high school certificates and also individuals possessing the postgraduate degrees being paid a relatively higher amount compared to the bachelor’s holders. These are some of the circumstances that are agreeable in every economy because everyone should be paid according to education they possess. However, this is not the case in the United States, the majority of bachelors holders are going through very many challenges, as if they did not go to school. For instance, high school teachers are paid very poorly in most parts of the United States regardless of their certificates. This has led to demonstrations being conducted by the working groups, which feel intimidated time and again. Conversely, the main reason behind this issue of the rich gaining more riches is caused by two things; one is the political influence, where the government and politicians seem to support specific individuals because they feel that they support the economy of the country, and finally is their own influence in the job positions they hold. Being the employer in their job positions, would automatically make him or her influence their staff to reduce the taxes they pay and increase their allowances yet they make no positive impact to the economy. This is however an idea that all the authors agreed upon.
Since the crisis hit the United States in the financial year 2008, many Americans have lived for years without getting even a single job. In this regard, the workforce is there but the jobs are so few that they cannot sustain the whole unemployed population. These authors also agree here that the cases of unemployment rose up to almost 13 million in 2011 from an aggregate of 7 million in 2007. Additionally, quite a large number of individuals have lost their jobs after 2008 compared to the previous years before the catastrophe hit the country. Therefore, due to the continued economic imbalance in the country at the moment, the government has not yet achieved its target of reducing the population of the involuntarily unemployed individuals. To make the matters worse, the government has gone to an extent of banning some of the private sectors and organizations, which would create employment chances for millions of the unemployed population in the United States. Nevertheless, this is one of the reasons that the economy is still staggering since the economic crisis struck the country in 2008.
Without putting some short-term solutions in place to help the country get out of the depression now, this would continue to stab the economy more where the most affected will be the citizens, both the employed and unemployed ones. As such, inflation has drastically hit the country with the prices of the most commonly used products shooting highly. However, some of the nations concerned with the economy of the United States decided to involve themselves in bid to reduce the rate of the inflation. The United States government has for some time failed to meet the target of employing the people, due the problems associated with the economy. Some of the results of this failure to meet the demand were the employment of only few individuals. However, these individuals could not manage to produce enough products to be consumed or rather be used by all the American population, leading to the inflation. According to the other authors who have better knowledge in this field of economics, this argument of inflation is relatively true keeping in mind the high population in the United States.
The author worried about the size of the debt the country is owed by the outside community. In an attempt to get itself out of the depression, the government decided to borrow some money from the international community, which later did nothing because there were no plans put in place on the usage of the borrowed cash. However, after wasting the cash on activities that neither stabilized the economy nor created employment opportunities, the government heavily depended on the taxes. To be able to pay the debt in time, the government has imposed heavy taxes on its citizens, without regarding whether they are employed or not. This is also an idea that all the authors came into agreement with because they are all anxious on the next step that the government will take.
Inequality and Crises among the Citizens
The author here becomes wary on why the income shares of the top officials were increasing without any hindrance. The idea here is that, the shares seem to be highly concentrated on those who are already rich, while other middle-class citizens struggled to make it at their jobs and even businesses. Therefore, having enough extra cash in their locale, the few rich individuals spend extremely larger amounts to meet all their demands leading to overconsumption in the state. This then creates a gap between them and the next group of individuals who earn relatively lower amounts, making the latter to be the victims of all the debts in place. This big gap between the two groups of people makes it exceptionally difficult for the middle-class people to achieve their goals in terms of finances. However, some of the economists argue that, the American government should have taken the advantage of the inequality among its citizens to find out the ways to counter the problem in some way so that all the individuals could come to almost the same level. On the other hand, this idea is seen as not being applicable because the few individuals, who are also the policy makers, do not care for other citizens’ rights leading to them creating policies which do not play any important role in the society. This impression also seems to be in an agreement with the other authors because they all argue that the so called policy makers have been blinded by the large sums of money they receive making them to forget if there are other people who are suffering in the nation.
Relationship between Krugman’s Key Points and other Authors
From Krugman’s book “End This Depression Now”, this piece of writing shifts its focus to another related book, which analyses almost the same concepts and ideas as the one above. Therefore, the paper targets to analyze Joseph Stiglitz’s “The Price of Inequality: How today’s divided society endangers our future”. The book is concerned with the higher rates at which inequality is rising in most of the countries in the world. The author therefore states that, besides it being an immoral act in the society, inequality works to ruin the economy of the state because only few individuals actually benefit from it. Stiglitz has therefore outlined some understandable points which should then be looked at.
There is much concentration of Wealth than Income in America
It is so demoralizing to note that the richest people in the United States hold so much wealth compared to those in the middle or lower class. The author argues that, the richest 1 percent of the Americans has almost 35 percent of wealth in their possession. There are instances where the income of a single family surpasses that of the bottom 45 percent of the Americans whose income is relatively lower. However, a number of the richer guys lost their wealth while the others’ were affected after the crisis that hit the country. This idea is not agreed upon by all the authors because while Stiglitz argues that the levels of inequality experienced in the country can have greater consequences, Krugman on the other side claims that the effect of inequality cannot be so dangerous to that level of taking the country to a greater depression.
Ethnicity leads to Depression
The author’s major concerns on ethical effects in a country that has made greater strides in terms of advancement. Having enrolled campaigns and fights against racism in the recent years, there seems to be other problems (racial segregation) that still emerges. In this regard, the problem has to be addressed to strike a balance between the population and the state resources. In America, racism has affected the distribution of wealth in a number of ways with the whites at the top cream of wealth as compared to other races. This however is an issue that all the authors have agreed that it needs to be eliminated so that ethical conflicts are mitigated.
Concentration of Income at the Top Levels
Another concern is about the ratio at which the income of the individuals in the United States has been divided. While few people seem to be enjoying life because of what they are earning, a relatively large population is living below the federal poverty level. This does not only include the unemployed individuals, but it also consists of school going children. These young and innocent individuals find it hard to even receive their basic educational rights, because of the poor conditions of their families, which cannot even afford food for the family at some points. Some of the individuals especially those possessing high school degrees and employed have seen their income declining by a margin of over 40 percent making it harder for them to make it in life. Also, this is one of the arguments that the authors have come into agreement in regard to the poor states of most families in the United States.
Inequality in the Opportunities
Besides the wealth, inequality has extended its roots to the distribution of opportunities in the country, which is the United States. The author argues that, America has attained its equality in life but with the least equality in opportunities. A relatively higher number of young individuals have turned to depend on their parents instead of moving around that state looking for jobs due to inequality in job distribution. America being the leading developed country in terms of inequality in the world, seems to direct its employment opportunities to those people or groups that are in the middle class. However, inequality is not only experienced in the employment sector, but also in other sectors including the health sector. This has made many individuals to waste their energy and skills, making it even harder for them to live up to their dreams, and it is an idea that is agreed upon by all the authors.
Formation of Poor Policies has led to Inequality
There are a number of western countries that have been able to manage and even reduce the rates of inequality by greater percentages. They have not just reduced inequality, but the rates of equality have risen significantly. The authors here come to an agreement that, the American policies all along from financing of the education systems to the corporate governance have greatly affected the poor while benefiting the rich in the country (Stiglitz 2012, p.86). These policies however need to be reviewed so that more chances of equality are created in a nation like America, which has earned much respect from other countries.
Finally, this paper will focus on another book by Maria Karamessini named “Women and Austerity: The Economic Crisis and the Future of Gender Equality”. This book mainly aims at discussing the impact of austerity on gender after the occurrence of the economic crisis. The government opted for this method after seeing that the crisis would have more severe effects if not managed at the level it had reached.
Closure of Gender Gaps
It can be noted that after the crisis hit the United States and some of the European nations, its effects were majorly felt by those in the working positions. Since most men worked in volatile job positions, a large number of them lost the jobs while their counterparts, the women, did not lose as much as they did. This therefore made most men to stay at home while women attended to their places of work. The authors therefore agree that, due to the greater impact caused on the jobs of men, women were able to catch up with them and close that gap that existed between them for many years.
Increased female headed Households
Due to the 2008 crisis, many men lost their jobs and therefore could not even manage to take care of their families. Combining the heavy restrictions put in place by the government with the unemployment at hand, most of the marriages were affected. Men left their families and went out to live their own lives because of the pressure in the family, leaving the women, who are the breadwinners, to take care for them. It is therefore agreeable that, the number of households headed by the women was increasing significantly compared to those that had both partners.
Increased Inequalities within Women
Inequality is an issue that has been on the rise, especially after the catastrophe hit the western countries, including the United States in the financial year of 2008. However, the United States was one of the most affected among all the countries by inequality. Although it affected the general American population, the author states that the women were the most affected group of people. Since most of the women maintained their jobs even after the crisis, the government saw no need to create more opportunities for them and therefore decided to help the men first. This is therefore contrary to the other authors who argue that the inequality hit the whole population regardless of the gender.
Widening of Gender Gaps in the near future
It is a serious concern that men are still much better that the women in the society, considering the nations that were hit by the crisis. The gender gaps that are seen declining are among the groups of individuals that are less educated. However, when considerations are put in the more educated people in the locale, men are better compared to the women because a relatively larger number of them possess higher educational degrees. It is therefore feared that, if this public sector employment continues to deteriorate the way it is seen, the gap between men and women will widen even more as agreed upon by the authors.
Austerity will harm women more than men
The author finally suggests that, when the austerity policy is put into full implementation, the employment of women will be highly affected compared that of men. She goes ahead and describes the future of gender equality as bleak. The author argues that the government may decide to impose strict regulations on the women’s employment compared to the men because their jobs have relatively been stable after the crisis hit them. This is also contrary to the other authors’ opinions who state that, austerity will be applied on both genders equally, without considering the stability of the job.
In conclusion, the topic has had a deeper analysis about the state of the economy in the United States after the country was faced by the 2008 catastrophe. This raised many challenges among the American citizens, which later mounted more pressure on the government. However, the government tried to respond to the problem in many ways, by it has not yet found the best solution. Therefore, for the future of the country to be safe, the government should focus on some short-term solutions instead of the long-term to save the situation of the Americans. Some of the policies should be reviewed in the near future, so that more problems can be avoided.
Regarding my final thoughts, Krugman has tried to pose the question on what should be done now that the country was already in a crisis. He goes ahead and gives some solutions to the questions, and I think the government should consider them so as to save the economy of the country. The other authors have also tried their best to analyze the problem and their efforts should also not be taken just for granted. Therefore, the American economy can still retain its previous state and regain its stability if only the government hears the cries of the larger American population that is suffering and focuses on helping it.
Krugman, Paul. End this depression now!. WW Norton & Company, 2012.
Stiglitz, Joseph E. The price of inequality: How today's divided society endangers our future. WW Norton & Company, 2012.
Karamessini, Maria, and Jill Rubery, eds. Women and austerity: The economic crisis and the future for gender equality. Vol. 11. Routledge, 2013.
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