Why Western economies are strangled again?

Like all living things the economy needs a regular health check and the correct treatment prescribed for the correct condition if and when it’s needed. To put it simply – popping an aspirin daily for a recurring headache that won’t shift is never a cure but a temporary pain relief – and no matter how many pills are taken or how strong the dosage is, it will never cure that headache.

In 2008 when the economic crisis first hit, Europe, the US and Britain, all took huge doses of aspirin to relief their headaches – but as we now know – those weren’t simple headaches and something more long term was needed to cure the pain. That’s why some countries are going back for more help, others are faltering in their progress and giant economies are crumbling before our own eyes!

As gloomy as it might seem, there is still an opportunity to do the right thing and that is to cut, cut, cut and cut some more. Sounds harsh, but throwing good money at a chronic problem, as we saw, will only give a temporary relief – same as using a high dose aspirin to cure a brain tumor. Not getting to the root of the problem a second time is unwise dangerous and extremely self-serving.

To use a simple example – take personal debt – monthly paying only the minimum payment of a large credit card bill will not clear it out (especially if the card is still being used) it will only reduce it slightly and pass the problem on – but paying the minimum plus a little more and using the card less (or not at all) will help clear the debt or leave a manageable balance to pass on.

Governments and nations’ debts are the same – pay big chunks now get more relief later – pay nothing or little now endure the pain for longer, Simples!