China’s Rise: Should the U.S. be Concerned?

For many years, the U.S. has enjoyed so much publicity and honor as it tagged as the last remaining superpower and having the largest economy in the whole world. With a GDP of over $14 trillion, the U.S. enjoys being tagged as the center for global manufacturing and financial sector. Also, having a per capita income of $46,381 indicates that Americans have one of the highest qualities of living in the world. That is why the sudden boom on the Chinese economy has caused a certain sense in urgency for the U.S.

Recent figures showed that China’s economy has replaced Japan as the second largest economy in the world. In the April-to-June quarter, China’s nominal GDP accounted to $1.335 trillion compared to Japan’s $1.286 trillion. Although Japan’s economy never really shrunk, the growth was slower. Also, the Chinese economic boom was dubbed as miraculous having become the number 1 exporting country in the world. A power shift is expected in the next couple of years as China might decide to assert its power and influence unto the world.

There have been frequent debates and arguments with regards to the concerns of the U.S. on the sudden rise of China. Some feared that the sudden shift in power will result in conflict and aggression. Recently, the U.S. has expressed concern on China’s ambitious plan to fully occupy the controversial Spratlys islands and deploy naval troops there. The U.S. has mentioned that China should resolve that matter along with other claimants in a peaceful way. The Chinese naval presence has been continuously expanding and covering more space than ever before.

Despite having the 2nd largest economy in the world, China still has internal issues such as only having $3,999 in per capita income. It is still home to some of the poorest people in the world while Japan enjoys a $41,366 per capita income which is one of the highest in the world. China still needs to scatter the wealth if it wants to overtake the U.S. and claim the number one spot.

The possibility of a U.S.-China conflict is still inevitable as both countries are totally dependent with each other especially when talking about trade. I don’t see anything wrong about the sudden rise in power by China. The only thing that the world has to be concern of is when China decides to be aggressive. Nevertheless, a productive China will still benefit a lot of countries such as the U.S. as trade and economic activity will be very much active.

More Crimes are Now Directed Against Homeless People

During this time of economic recession and uncertainty, losing your home may be a very serious thing to happen. With the collapse of top financial institutions, remortgages become more expensive and people just couldn’t do anything but default on their real state plans. Uncontrollable debts have also caused widespread confiscation of homes and real estate properties and will continue to do so as interest rates soar high. People across the nation are losing their homes faster as the economy is still at a standstill.

What makes things more complicated is the sudden increase in crimes that target homeless or street people. In the year 2008, there were about 27 homeless people killed. In 2009, that figure almost doubled with 43 people getting killed. The figures only count the number of deaths not counting the thousands more of physical and verbal abuses experienced by these already struggling people. What makes them more vulnerable to these abuses is the fact that they live in streets making them more near to criminals and other evil elements.

This is such a huge concern especially among law enforcers, politicians and human rights advocates. National Coalition for the Homeless, a human rights advocacy group, implied in their report the traumatic and sometimes near-death experiences faced by homeless people. According to the report, there were cases when homeless people got doused by gasoline and were set on fire. There are also others who were badly beaten by bottles, baseball bats, metal pipes and other hard objects which can inflict direct physical pain and suffering.

It is intriguing to hear that the F.B.I. does not keep track on crimes committed to homeless people. Because of this, Maryland Democrat Senator Benjamin L. Cardin has already passed a bill which will require the F.B.I. to monitor the crimes committed to homeless people. The bill is already under review and will await deliberation. This rising problem with regards to violence against homeless people should be taken by politicians more seriously. As the recession continuous, more people are expected to lose their homes and live at city streets.

In a case in April 2009, three teenage boys were accused of beating a homeless man to death by smashing his skull with metal pipes and makeshift bats. Their plan was to beat up a “bum”. The homeless people are ones who are the most vulnerable to these inhumane attacks. If the government doesn’t do anything about it, more people will lose their lives and human rights abuses will continue. We call on the U.S. government to provide appropriate protection to these people and also help people to secure their homes.

The Economic Recession: A significant Increase in Suicide Cases

In this past, there have been numerous shortfalls and setbacks by the US government that left American citizens weeping in vain. The 9/11 attacks on the world trade center that left over 3000 people dead along with the recent Ground Zero controversy were highly considered a national humiliation on the failure of the government to protect its citizens from terror attacks and promote respect to the victims of the tragedy. What people don’t realize is that there is something more humiliating than these previous events.

Since the beginning of the economic recession, people have been losing there jobs from left to right. The failure of every business entity created a domino effect that affected thousands of workers or employees leaving them without a source of income. This resulted in widespread panic and threatened the well-being of people. But recent studies showed that unemployment or joblessness may in fact affect the psychological aspect of every person. Aside from having a low morale and lesser productivity, joblessness may in increase the tendency of every person to commit suicide.

Suicidal tendencies are usually triggered by excessive drug usage, relationship problems or social struggles. But the economic recession has brought so many problems to individuals that they tend to believe that these problems will go on forever. Losing a job can really bring a huge burden especially to couples who already have children. Unemployed individuals tend to feel desperate and unease thinking about their bleak and uncertain future. Hopelessness will eventually force someone to do this immoral act of taking one’s life.

Though it hasn’t been scientifically proven yet, trends from several places that experienced the recent recession showed a dramatic increase in suicide cases. For example, in rural Elkhart County, Indiana, the unemployment rate at this year stood at 13.7 percent while the suicide rate was 40 percent more compared to previous non-recession years. The National Suicide Prevention Lifeline also received more suicide calls at this time of recession. In Jan. 2007, there were only about 13,423 calls. A year later, there were 39,467. In August, 2009, there were now about 57,625 calls from across the nation.

But perhaps the most humiliating thing about this is the failure of the government to prevent such instances. The lack of preventive steps and assistance paved the way for more human suffering felt by millions of Americans all across the nation. It is a sad fact that America’s own economy is the one responsible for the deaths of its people. Lack of trust and confidence in the government forced people to end their suffering by taking their own lives. It is wakeup call to all politicians, policymakers and lawmakers to do whatever they can to protect the welfare and well-being of its citizens.

Lesser Spending Power from Retirees: Another Huge Threat to the Economy

For decades, the United States of America has been a major economic player and the only remaining superpower in the world. Despite of this highly respected status, the US economy has slowly but steadily declined with the recent economic recession creating havoc among financial institutions and business entities. Another troubling fact is the continuous rise in unemployment levels all throughout the nation. Massive layoffs implemented by big and small companies have contributed to lesser consumer income and spending. Lesser revenue collection while overspending on various government programs that resulted in a huge budget deficit have only made matters worse.

Despite the recent failure of the government to stimulate economic recovery, there is another looming problem which will eventually pose a bigger threat to the already suffering economy. In the years to come, a whole lot of people will eventually retire without having enough savings. With the devastating effects of the global recession that has continued to plague businesses, workers born in between the years 1946 to 1964 will have less money during retirement. The problem here is that these retirees will eventually spend less because of their lack in savings.

The financial crisis has affected not only the cash savings of individuals but also the value of their house as well. Close to zero interest rates on house mortgages benefited house buyers while leaving retirees to suffer from not having enough financial resources. It is expected that about 36 million Americans will be turning 65 in the next decade. With lower bond yields and a falling stock market, these retirees are facing a bleak and struggling future. Lower asset values will easily translate in lesser money for retirees to spend during their time of retirement.

Research showed that as of the year 2008, people aging from 65 to 74 were already spending 12.3% lesser than they did 10 years earlier. There was a 46% drop in car spending, 35% drop in home and household furnishings and 27% drop from eating in restaurants or food chains. Despite of this, they eventually spent 75% more on health care and 131% more on health insurance. This clearly showed how older people are now faced with the serious task of retiring without having enough money to buy basic commodities and enjoy life.

These implications are not only limited to people who will be retiring during the next decade. Younger people of today will now have to save more money by reducing consumption in order to ensure a brighter future. Without appropriate jobs for everyone, more people will eventually suffer poverty as they grow older. Also, the economy will be at a standstill if consumer spending is reduced. Economic recovery will only be achieved if the consumers are given back the capability to spend and buy goods and services. Job creation should really be the primary focus of the government if they want to save America and avoid double-dip recession.

The Moral Hazard Argument and its Implications to Unemployment

The first thing that comes to our mind when we hear about an economic recession is the collapse of numerous business and financial institutions. But perhaps the most significant and most destructive consequences are the massive layoffs and the rise of unemployment levels. With an underperforming economy, business institutions are forced to trim their workforce in order to reduce expenses and increase profit. Unknowing of the greater risks, these layoffs will in fact cause numerous unlikable and devastating consequences in the future.

It is such an eerie and uncomfortable feeling whenever you lost your job which was your only source of income. Most people utterly despise having come to a state of poverty or at least being unable to purchase what one needs or what one wants. Americans will definitely agree with me in mentioning that finding jobs today isn’t as easy as during pre-recession period. More people are losing their jobs or their source of income compared to people who gets accepted for work.

The U.S. Department of Labor stated that the U.S. unemployment rate is now at 9.5% and will continue increase if the government doesn’t find immediate solutions to create newer jobs. What worries most economists and individuals are the 479,000 people who recently lost their jobs and now are applying for unemployment benefits. In July, Republican senators tried to prevent the extension of jobless benefits for 2.5 million Americans. Republicans argue that $34 billion price tag for the bill isn’t reasonable enough as it will only increase the budget deficit.

Arizona Senator Jon Kyl voiced out a more philosophical approach indicating that unemployment insurance doesn’t create newer jobs and will only hinder people from seeking a new work. He emphasized that it is a moral hazard when unemployed people behave irresponsibly and become lazy when given jobless compensation. Several economists and advisers are worried that the U.S. might well become like Europe where unemployment benefits are permanently available and with the unemployment rate considerably higher at normal or recession-free times.

The moral hazard argument was basically tagged as inapplicable at recent times because of the many problems that the nation is facing. Today’s situation is certainly not normal and bad things really do happen. Raj Chetty, a Harvard economist, emphasized that in a recession, cutting jobless benefits to encourage them to look for jobs that do not basically do not exist is very unreasonable. Democrats will pursue the extension of jobless benefits in order to stop the bleeding and prevent jobless people from drowning more into poverty.