Financial turmoil, as seen, has been an erratic problem of the world right now. People lose their jobs as a result of losses and unnecessary over-spending that companies have incurred the past years. Some have had a direct impact on their consumption. As to whatever they have had as a lifestyle, buying luxurious stuff and the like might be separated from them as an effect. It is more likely that nobody wants it since nobody benefits from this kind of situation.
As to what the speaker have stated, the remedy to this kind of turmoil is none other than reformation of several laws like more increase of taxes that would be levied to people and other laws that I think might not even affect the issue. My stand to this and what I have had in mind is people should keep on spending. It does not necessarily mean to spend for the sake of comfort but consume more wisely of what we think we might need in life. For example, some insurance companies are executing their operations or have executed their operations already since everybody is scared of making an investment. It is currently seen that no one would even like to acquire insurance. It is either they are scared that the company they trust would close and might not return their investment or they deem that it is not exceptional to get insured in turbulent times like this.
It was explained in economics that in order to keep the economy stable, the flow of money cycle should be stable. Like what I have said, continuous consumption would lead to better demand for products and therefore still make companies profitable. This is very evident in the crisis we are experiencing now that amplified around the globe starting from America. After rumors of bankruptcies, people panicked and started hoarding money, or saving on a personal level. This in return worsened the scenario of financial institutions in America, closing large banks and companies.
But then, people should keep in mind that they should spend wisely, buying goods and services they only need and they can only afford. Another problem encountered in the American Crisis is the lack of the people’s initiative to pay their debts. They buy expensive products like iPhone, iMac, a Ferrari car, etc. using their credit cards or make a loan from different lending services. As a result of this lack of initiation, interests grow and they would not be able to pay it.
