In: Economics
Evaluate and analyze the consequences of the solutions for an economic recession for jobless individuals around the age of 22, who can't pay off their loans, and for society's overall economy. (How are the public finances, companies etc affected by the measures taken to make economic boom)
Make a thorough and nuanced explanation please!
DON'T POST OLD ANSWERS FOR THIS QUESTION!!!!!
In order to write nuanced answers, it is necessary to answer from different perspectives. To do objective reasoning showing things from different directions. A consequence can be positive for one party but negative for someone else. Or positive in a short-term perspective but negative in the long run. It usually depends only on how to look at the matter. Your task is to showcase these different perspectives. Show that you have a deeper understanding of the subject's complexity. That reality is not black and white, but it's a gray area.
solution......
Economic recessions are often portrayed as short-term events.
However, as a substantial body of economic literature shows, the
consequences of high unemployment, falling incomes, and reduced
economic activity can have lasting consequences. For example, job
loss and falling incomes can force families to delay or forgo a
college education for their children. Frozen credit markets and
depressed consumer spending can stop the creation of otherwise
vibrant small businesses. Larger companies may delay or reduce
spending on R&D.
In each of these cases, an economic recession can lead to
“scarring”—that is, long-lasting damage to individuals’ economic
situations and the economy more broadly. This report examines some
of the evidence demonstrating the long-run consequences of
recessions. Findings include:
Educational achievement:
Unemployment and income losses can reduce educational achievement
by threatening early childhood nutrition; reducing families’
abilities to provide a supportive learning environment (including
adequate health care, summer activities, and stable housing); and
by forcing a delay or abandonment of college plans.
Opportunity:
Recession-induced job and income losses can have lasting
consequences on individuals and families. The increase in poverty
that will occur as a result of the recession, for example, will
have lasting consequences for kids, and will impose long-lasting
costs on the economy.
Private investment:
Total non-residential investment is down by 20% from peak levels
through the second quarter of 2009. The reduction in investment
will lead to reduced production capacity for years to come.
Furthermore, since technology is often embedded in new capital
equipment, the investment slowdown can also be expected to reduce
the adoption of new innovations.
Entrepreneurial activity and business formation:
New and small businesses are often at the forefront of
technological advancement. With the credit crunch and the reduction
in consumer demand, small businesses are seeing a double squeeze.
For example, in 2008, 43,500 businesses filed for bankruptcy, up
from 28,300 businesses in 2007 and more than double the 19,700
filings in 2006. Only 21 active firms had an initial public
offering in 2008, down from an average of 163 in the four years
prior.
There is also substantial evidence that economic outcomes are
passed across generations. As such, economic hardships for parents
will mean more economic hurdles for their children. While it is
often said that deficits can cause transfers of wealth from future
generations of taxpayers to the present, this cost must also be
compared with the economic consequences of recessions that are also
passed to future generations.
This analysis also suggests that efforts to stimulate the economy
can be very effective over both the short- and long-run. Using a
simple illustrative accounting framework, it is shown that an
economic stimulus can lead to a short-run boost in output that
outweighs the additional interest costs of the associated debt
increase. This is especially true over a short horizon.
A recession, therefore, should not be thought of as a one-time
event that stresses individuals and families for a couple of years.
Rather, economic downturns will impact the future prospects of all
family members, including children, and will have consequences for
years to come.