Why I Believe We Need a New Type of Financial System for the Global Economy
Our world is always evolving, constantly changing. History teaches us many lessons and we all benefit when we use those lessons to build a better society. Our global economy is also a work in progress. The world's financial system is currently experiencing numerous setbacks and facing many difficult new challenges.
I believe we need a new type of financial system for the global economy. We need a system that will recognize the realities of the world we live in and make changes and adjustments that will improve the standard of living for everyone.
Our current global financial system is not working. Many countries are in such serious financial distress that they need to be bailed out by the rest of the world. The problem as I see it is that we all are living on borrowed money and it is becoming increasingly difficult to service that debt. Whether it is a government that can not afford to provide essential services to meet the needs of the most vulnerable segment of the population or an individual that can not afford to make the mortgage payment on his home, we are in troubling economic times.
Over the years, there has been much debate over the best way to grow an economy and improve the standard of living. In the United States, for example, the Democrats tend to believe in a government that provides all of the basic services and needs of the people. The Republicans believe that people should fend for themselves as long as they are physically capable of working and earning a living.
Capitalism, while probably the greatest financial system ever created, does have its share of problems. Distribution of wealth is at the head of the list. In a capitalistic society, there are those that do very well financially speaking and others that are left behind.
Many people that have worked hard and built a secure financial life for themselves and their families harbor some resentment when they see their taxes going up to pay for programs that support those that do not work and seem to be unable to fend for themselves. Welfare, Medicaid, Food Stamps and numerous other social programs drain the resources of an economy and discourage productivity.
Those that do receive aid or assistance from the government feel that they are entitled to be taken care of because they were not given the same opportunities as those that are financially more successful. It is this constant battle between those that have and those that do not that has led to the decline in the overall economy in America as well as the rest of the world.
With the political unrest taking place in Egypt, Libya and many other countries around the world, most of the disenchantment stems from an unfair financial system. The common man must live in near poverty so the elite and well-to-do can remain in their multi-million dollar estates. Naturally, after so much time being denied basic human rights and decent living conditions, people will rise up and demand change.
Some of the civil unrest can be attributed to religious beliefs and some of it can be based on the violation of people's basic human rights. I firmly believe that most of the civil unrest is a result of the unfair distribution of a countries wealth.
Oil and the cost of energy have perhaps the greatest impact on the global economy. The entire financial system is based on the ability to produce goods and be able to transport them to places they are needed. It takes oil and energy to run the plants that manufacture the goods. It takes energy to drive the tractors that plow the fields where our food is grown. It takes energy to transport the goods across our roads and it takes energy to heat and cool our homes.
Our dependence on oil as the main source of energy makes us extremely susceptible to the price of oil. As the major oil producing nations are free to raise or lower prices as they see fit and speculators only exaggerate the movement in the price of a barrel of oil, the entire world must absorb the cost. It is quite obvious that the only reason the Western World gets involved in the internal affairs of sovereign countries in the Middle East is because of oil.
Were our energy policy to change and we made a major shift to alternative energy sources, the laws of supply and demand would take over and the price of oil would drop dramatically. We are slowly moving toward better fuel efficiency in our vehicles, but there is much more to do. I think there should be major incentives to encourage solar heating, the use of natural gas and the development of wind power. Nuclear energy should also be pushed forward and all other ideas that could save energy should be discussed.
The advancements in technology are probably our best chance to reduce the amount of energy a typical family consumes. The idea of working from home is know a very real possibility for millions of jobs. Cutting the work week down to 4 days would save an enormous amount of gas. Business meetings held by teleconference would avoid unnecessary air travel. There are countless ways that our ability to communicate through social networks and other electronic means makes us less energy dependent.
This is a big drain on the world's financial system. A complete overhaul of how we pay for medical care is in order. No one seems to know how to tackle the problem. I believe the health care system has gotten so out of control that it is time to shrink the system. Have each city manage their own health care, cut out all of the waste and improve productivity by using the available technology to computerize records. Insurance companies need to be reigned in and all the crazy lawsuits need to be stopped. Medical Care is a huge problem that hangs over the global economy.
To truly compete in the global economy we must pay more attention to education. Countries like China and India have surged to the forefront in terms of importance in the world economy by stressing the importance of education to their people. In the United States, where we once were looked up to by the rest of the world, we are now somewhere in the middle of the pack when it comes to the education of our young people. Education needs to be made a top priority.
Changing our global financial system will not happen overnight or even over the next 10 years. It will be a slow process, but one that will ultimately result in a rise in the standard of living for everyone on the planet. Wars will continue to be fought over the earth's resources and how they are allocated. Banks will need to take the lead in providing the loans (nowadays, you can Apply for short term money loans online) that will allow us to finance new green projects that will benefit the world. Wall Street will need to institute policies that will crack down on rampant speculation that drives up prices. The more countries and governments can work together, the better off we will be.