Economics Term Paper Example | Topics and Well Written Essays - 2000 words

Economics - Term Paper Example My point throughout the paper is what I had emphasized at the beginning of the previous paragraph. The contention here is that the world needs trade more than anything else and hence it would be prudent on the part of the governments of the world not to jettison free trade and globalization. I discuss the reasons for the current economic slowdown and the efforts of the government in containing the crisis and providing relief to the beleaguered sectors of the economy. I make the point that the current administration is taking steps to revive the economy, though the effects of those steps may not be felt in the short term. I make the case for international trade, albeit with a different focus by learning from the mistakes of the past. The indebtedness of the US economy vis-à  -vis the Chinese economy is discussed along with some suggestions to redress the balance. The US economy has been going through a period of turbulence for the last few years. The economic downturn that began in 2007 and is continuing to this day is a manifestation of the excessive credit policies and bad lending practices coupled with poor regulatory oversight by the authorities. The combination of these factors has ensured that the credit bubble when it burst did really cause the entire global economic system to go into a severe contraction. What makes this crisis different from the periodic cyclical downturns one witnesses during alternating periods of boom and bust is that this crisis has been caused by borrowing and lending practices that were highly questionable and on top of that excessive leveraging of the financial sector meant that the sector’s contribution. As Kevin Philips (2009) notes, â€Å"The principal wave of credit card use for debt consolidation and consumption crested in 2005, but industry growth had been enormous. Over the period from 1990 to 2003, the number