Income Inequality in United States - Free Essay Example

Sample details Pages: 7 Words: 1990 Downloads: 1 Date added: 2019/07/01 Category Finance Essay Level High school Topics: Income Inequality Essay Did you like this example? Introduction The United States has come a long way since it was first established in 1776. The U.S. economy has had its ups and downs, but still manages to be the strongest in the world. Don’t waste time! Our writers will create an original "Income Inequality in United States" essay for you Create order Just because the U.S. has the strongest economy, does not mean that it does not have its fair share of problems. Beginning in the 1970s, one problem that has been hurting the U.S. economy is income inequality. The 2013 documentary, Inequality for All, presented by Robert Reich has shone a light on how and why income inequality has hurt the economy over the years. There are many components that contribute to income inequality. Some of these components consist of rising inequality in wealth, debt, education, and the diminishing of the middle class. Rising Inequality in Wealth Over the years, the gap between the average earning workers and the top 1% of earners has widened. This creates an unequal distribution of wealth and is harming the working class. Robert Reich stated that the typical male worker earned $48,302 in 1978 while the top 1% earned $393,682 (Reich 2013: 5). These statistics drastically changed because in 2010 the male worker was making $33,751 and the top 1% was earning over a million dollars. Many factors come into play when discussing the reasons why income inequality has increased. Some of these factors include technology, government policies, the decline of manufacturing, and globalization. Technological advances have impacted society because it has improved conditions for some jobs, while replacing others. Advancement in computer technologies has minimized the need for bank tellers because there are now ATMs and access to bank statements and transactions online (Manza, 2018, p. 224). However, these advancements have created jobs for financial analysts, who need to have college degrees. Technology has created a college wage premium where people who have less than a college degree have had difficulty finding good jobs and their earnings have declined. This has happened because higher education has not grown as fast as technology has advanced. Therefore, people who have obtained college degrees have become scarcer, respective to the needs of the economy, and their scarcity results in higher paying salaries (Manza, 2018, p. 225). The college wage premium increases if technology advances faster than higher education because the educational system cannot produce enough train ed workers who are qualified to work with the new technology. It is important for people to have affordable access to higher education, so they will be able to find good jobs and better the economy. The government should be funding more money towards higher education and making it more affordable for everyone. The government can do this is by implementing a strict progressive tax system and not allowing the rich to report their income as capital gains. Reich says that the upper class pays about 15% in taxes, while the working class pays around 33% (Reich, 2013: 67). The taxation system is in favor of the rich and this causes problems for the economy. The government is in debt and by not having enoughtax revenue they have to cut spending for things like education, Medicare, and welfare. Giving tax breaks only makes rich people richer and hurts the working class. Another government policy that would help decrease income inequity is raising the minimum wage in relation to the inflation rate. In recent years, about 70% of people who are earning minimum wage are adults and many of them are women and minorities (Manza, 2018, p. 228). It is hard for people to take care of their familie s and pay for all their expenses when they are barely making ends meet. Increasing the minimum wage will help grow the economy because it will increase consumer spending. It will also improve worker productivity and reduce the number of resignations due to low wages. People will want to go to work if they believe they are being paid a reasonable wage. The United States has experienced a constant decline in manufacturing and industrial jobs, also known as deindustrialization. In 1950, nearly 40% of jobs were in manufacturing and industry, and the wages were fairly high for skilled manufacturing workers, but nowadays, merely 20% of jobs are in manufacturing (Manza, 2018, p. 225). The end-less threat of outsourcing jobs to other countries has helped constrain salaries for manufacturing workers. Deindustrialization has harmed workers because they are swapping out good jobs for bad ones that pay less and provide fewer benefits. Globalization is also a key factor in flattening out wages and increasing income inequality. Products that could be made in the U.S. are instead manufacturedoverseas because of cheaper labor. This takes jobs away from U.S. workers, but it gives jobs to people in other nations. However, these people in other nations are working in terrible conditions that are poor and unsafe and are paid immensely low wages. Globalization has caused companies to cut costs and increase their profits by holding down wages, reducing benefits, and disregarding their employees. This creates income inequality because the lower-level workers are making less money, while the executives are profiting and earning more money. Countries that prioritize higher education have dealt with globalization better because they created a highly skilled workforce (Reich, 2013: 41). Their wages are higher, but it is worth it to produce things that are so well made and meticulous. Debt Debt is something that everyone tries to avoid, but it is inevitable. With the rising costs of medical insurance, housing, college tuition, etc., people are taking out loans and mortgages to keep up with their living standards. Since wages are stagnant, people have accumulated more and more debt to cope with not having enough money. According to the U.S. Census Bureau, the median household income was $57,617 in 2016 (U.S. Census Bureau). However, the average American household is in $137,063, according to the Federal Reserve Bank (Sun, 2017). This suggests that many Americans are spending more money than they can afford. In the mid 90s onward, there was a vast rise in housing prices and Americans used their homes as collateral to pay for expenses. From 2001 to 2005, Americans cashed out over $500 billion in home equity to cover the costs of things like credit cards, student debt, and medical expenses (Reich, 2013: 58). People are in desperate need of money to be able to support thems elves and their families when their wages are going nowhere. How does this relate to income inequality? Well, when rich people are stockholders of a bank, they also own the mortgages and loans the bank has made. So, when someone makes an interest payment, that money is going to the rich stockholder. Education As previously mentioned, higher education is a possible solution to decrease the gap in income inequality. Robert Reich says that inequality is clearly related to education. During the Great Prosperity, higher education is what raised Americans out of poverty and into the middle class (Reich, 2013: 40). It was not until the late 1970s where college graduation rates started to level out. Over the years, tuition rates and fees have risen due to the government reducing spending for higher education, making college less affordable to the average American. Social reproduction is a factor when it comes to inequality in education. Children who grow up in a wealthier class receive more education than a child born into poverty. People born into poverty are stuck in a vicious cycle and it is hard for them to climb the social ladder when they do not have access to a good education system or the money to further their education. Over the last 50 years, the educational achievement gap can be better explained by family income rather than race (Manza, 2018, p. 370). Even though efforts have been made to improve the standards of schools, there has been a growth in the gap between poorer children and richer children. One of the reasons for this inequality is the quality of the access that these children have. Low-income families usually live in neighborhoods that have poor and under-funded public schools. When their children attend these schools, they are at a disadvantage because the schools lack the resources to fully educate their students. On the other hand, wealthy families invest a lot of money and resources to make sure their children are getting the best education possible. This leads to income inequality because the rich children had the opportunity to attend college and learn the skills needed to get a high paying job, while the poor child could not afford college and had to settle for working at a low wage job. Compared to other developed countries, the United States falls behind when it comes to international student assessment and high school graduation rates (Manza, 2018, p. 376). This is concerning because if other countries exceed the U.S. in education, they could potentially gain competition for economic growth and global business. Knowledge-based industries, such as pharmaceutical and software companies, are expected to be the future sources of economic growth and that is why it is important for American schools to continue competing with other countries. The United States should be investing in people, so they can attend colleges and learn the skills needed to join the workforce and in return better the economy. The Diminishing of the Middle Class In order for a country to be prosperous, it needs to have a stable economy and a strong middle class is what makes an economy stable. The United States economy is 70% consumer spending and the heart of consumer spending is the middle class (Reich, 2013: 10). As income inequality increases, the middle class begins to diminish and that is what is hurting the economy. This means that people are spending less money, wages stagnate, tax revenues decreases, companies downsize, government cuts programs, workers are less educated, and unemployment rises (Reich, 2013:59). This is known as the vicious cycle and it happens when the middle class doesnt have enough purchasing power. The middle class has gone into debt because of stagnating wages and this has created a debt bubble. This hurts the economy because people are spending less and GDP decreases. The United States still has one of the strongest economies, but that does not mean anything when it is screwing over Americans. GDP is supposed to represent quality of life and living standards for a countries residents, but that is clearly not the case for the United States. Income inequality and stagnating wages are the reasons the middle class is disappearing because the rich keep getting richer and the poor keep getting poorer. The rich are not the ones that keep the economy going because they do not spend enough money to produce a sufficient amount of economic activity. That is why the middle class is so important for economic stability, and without a strong and vibrant middle class, the U.S. will be stuck in a vicious cycle. Conclusion The United States economy cannot grow, if things remain the way they are. Change and reform need to occur, so that the quality of life and living standards of Americans can improve. The U.S. needs to be a part of a virtuous cycle in order to prosper. Since income inequality keeps increasing, social mobility has decreased. It is becoming harder for people to move up in social status because they do not have the resources to better themselves. The government needs to increase taxes for the rich because this will allow more tax revenue to be put into education and other beneficial programs. Investing in higher education will allow people to learn the skills needed to be able to compete in this current global economy. Creating a vibrant middle class will boost the economy by increasing consumer spending, but this cannot be achieved if wages continue to be stagnant. Increasing wages will help improve economic mobility and this in turn will allow for a big and wealthy middle class. No one wants to be financially struggling and having to live paycheck to paycheck. Change will not occur overnight, but society needs to speak up and address the problems in our economy, so solutions can start to be made.

Shawshank Redemption Film Techniques Analysis Essay

In the film The Shawshank Redemption, directed by Frank Darabont the purpose of the beginning sequence is to introduce us to Andy Dufresne and his situation; being accused of the murder of his wife and her lover. This sequence uses lighting, music, sound and camera work to show us Andy’s struggle. A production aspect that shows us this idea is lighting. Low Key Lighting is used in the scene when we see Andy in his car drinking bourbon and loading his hand gun. Low Key Lighting is when the lighting in a scene is dim and it is often used in movies to show people are thinking dark thoughts. This tells the viewer that Andy is going through a rough patch in his life watching his wife enter the room with her lover and it makes the viewer†¦show more content†¦It makes the audience feel afraid about what’s going to happen next. Another example of diegetic sound used to create a tense atmosphere is when Andy first arrives to prison. We hear the inmates’ voices, whistling, screaming and banging the gates. This makes them seem mean and the scene tense and makes the viewer think that Andy has arrived to a dangerous and horrible place and that he could be in danger there. These sounds make us feel anxious for him about his new home because the inmates seem intense and mean. Moreover another production aspect used to show us this idea is music. Music is used to create mood and help us understand what a character is going through. We hear violin and string instruments as Andy arrives to Shawshank Prison. Violin and string instruments are used in movies a lot to make the viewer feel sad about something happening or about to happen. We first hear Orchestral Music when we are shown Shawshank Prison we hear it playing in the background low volume and slow tempo and this increases in volume and tempo to create a sad mood for Andy’s arrival and emphasise that the prison is a dark and depressing place to end up. It suggests to the viewer that the prison is a sad place to end up in and that it is a corrupted place too. It makes us worried for Andy who seems like a good guy. Another example of Music used toShow MoreRelatedAnalysis Of The Shawshank Redemption By Frank Darabont1116 Words   |  5 PagesEvaluative Essay October 13th, 2015 Evaluative Analysis: The Shawshank Redemption When it comes to movies, I am not exactly what you could consider well-versed. Had it not been for several close friends of mine, I would have never even seen blockbuster hits such as Harry Potter, The Lord of the Rings, or Back to the Future. The reason for this is not because I dislike watching movies, but rather due to the restrictive nature of my parents. Thus, I have not had the privilege to enjoy The Shawshank RedemptionRead MoreFinal Film Critique Essay2458 Words   |  10 PagesFinal Film Critique Richard Hogan ENG 225: Introduction to Film October 25, 2011 Final Film Critique Introduction The movie, The Shawshank Redemption (1994), is based on a character Andy Dufresne. Andy is a young and successful banker who is sent to Shawshank Prison for murdering his wife and her secret lover. His life is changed drastically upon being convicted and being sent to prison. He is sent to prison to serve a life term. Over the 20-years in prison, Andy retains optimismRead MoreProject Mgmt296381 Words   |  1186 PagesLeadership Chapter 2 Organization Strategy and Project Selection 1.4 Projects and programs (.2) 1.4.1 Managing the portfolio 1.4.3 Strategy and projects 2.3 Stakeholders and review boards 12.1 RFP’s and vendor selection (.3.4.5) 11.2.2.6 SWAT analysis 6.5.2.7 Schedule compression 9.4.2.5 Leadership skills G.1 Project leadership 10.1 Stakeholder management Chapter 11 Teams Chapter 3 Organization: Structure and Culture 2.4.1 Organization cultures [G.7] 2.4.2 Organization structure

Essay on Iago the Green - Eyed Monster - 968 Words

In the Shakespearean play Othello, the â€Å"Green – Eyed Monster†, otherwise known as jealousy, is nothing but a killer. It is a creature that drove Iago to his monstrous revenge plot. During the duration of the play, jealousy was one of the main motives Iago had as a foundation in his plot to destroy Othello. As the lowest ranking officer, Othello’s ancient, Iago wanted to be promoted to the lieutenant position. In the opening scene of Act I, Iago described his jealousy towards Michael Cassio to Roderigo. He described how Cassio had, â€Å"never set squadron in the field† and that his knowledge of battle is only known through books (I.I.23). Unlike Michael Cassio, Iago had been in the army for years and felt betrayed by none other than the†¦show more content†¦Othello, in the beginning of the play, was a strong and powerful man that was in love with the daughter of Brabantio, Desdemona. However, according to Nordlund, the love was â€Å"f lawed.† Although she loved him for his victories and adventures in battle, critics such as Noll and Godfrey felt he loved her because he was loved by someone. Nevertheless, this idea did not prevent them from marriage; the start of the downfall. The marriage between Othello and Desdemona caused pandemonium within the community, especially within Brabantio and Roderigo. Brabantio initially felt that the marriage was the effect of Othello’s witchcraft, as said in Act 1 Scene 3, but once Desdemona had informed him otherwise, that did not prevent his feeling of her betrayal. Brabantio was jealous that he no longer had control over his daughter and he warned Othello to watch over her for she can betray him as well; â€Å"She has deceived her father, and may thee† (I.III.334). Roderigo on the other hand, was jealous of Othello for being married to Desdemona because he was in love with he. During the play, Roderigo was the kind of man that did anything it took to gain the love of Desdemona, and Iago clearly used that to his advantage. Iago reassured that Roderigo would gain Desdemona’s love by saying, â€Å"also she will realize the wrong of her ways,† giving hope to the envious RoderigoShow MoreRelatedThe Relationship Between Love And Hate In Othello Essay1656 Words   |  7 Pagesan unusual description of a man who murders his own wife. However, Othellos feelings of hate for Desdemona started as an overwhelming love for her when their relationship began. This transformation from love to hate also inflicted the characters Iago and Roderigo and like Othello their hatred resulted in the murder of innocent people. Roderigos love for Desdemona was transformed into hate towards any man that he thought was loved by her. Iagos love for his jo b and his wife, Emilia changed intoRead MoreIn Shakespeare’s Othello, Othello Is as Much a Victim of His Own Weaknesses as of Iago’s Plotting. Write an Essay That Explores the Construction of Othello’s Character in Parker’s Film and Shakespeare’s Play.910 Words   |  4 Pagesfilm devices. Both the play and the film masterfully spin a tale of romance, tragedy and death telling the fall of glory of Othello due to the acts of his ensign Iago, albeit with several differences in the presentation. Both Shakespeare and Parker explore themes of jealousy, power, and racism through the key characters of Othello and Iago. Parker utilises cutting, close-ups, mise-en-scene, music and a variety of others to bring his own in-depth dissection and construction of Othello. In the openingRead MoreOthello by William Shakespeare: An Epic Play Worth Reading1406 Words   |  6 PagesThis play is Shakesphere’s Othello and it is one with an epic war between Love and Evil. While reading Othello, one encounters such diverse and dynamic characters as, Othello, Desdemona, Rodergio, Iago, and Cassio. These characters are all affected, in some way either by jealousy, or manipulated by Iago to feel jealousy. The literary techniques that Shakespeare uses to advance the theme of â€Å"Jealousy ultimately destroys those affected by it,† are: characterization and personification. Another themeRead MoreIagos Description And Identity In Othello1932 Words   |  8 Pages my lord, of jealousy! / It is the green-eyed monster, which doth mock / The meat it feeds on† (Shakespeare 1.1. 165-67). The notion of jealousy being coined as a â€Å"green-eyed monster† is familiar in many forms of literature. Iago, one of Shakespeare’s most infamous villains, uses this line to warn Othello of the dangers of jealousy, although it is later revealed that Iago is the most jealous character in the play. Is Iago’s description of the green-eyed monster only a symbol? How real can it becomeRead More Othello the Tragic Hero Essay912 Words   |  4 Pagespersuades them to do stupid things. William Shakespeare portrayed this flaw extremly well in the play Othello. IN the play, Othello, is a character who seems almost perfect, but his flaw jealousy is brought out but his trusted companion Iago. This trait makes Othello the tragic hero due to the fact that he sacrifices his life in good name. When being accused of â€Å"witchcraft† by Barbantio ( Desdemonas father) and senators he remains in control and courageous. â€Å" Most potentRead MoreUse of Imagery in Othello1555 Words   |  7 Pageshis words. A great author can create the same imagery for centuries to come. The function of imagery in the mid-sixteenth century play Othello by William Shakespeare is to add characterization and eventually define meaning in the play. The antagonist Iago is defined through various images, some being the use of poison and sleeping aids, to show his true evil nature. Othello’s character is also shaped by imagery such as the black and white, animalistic, and horse images, which indicates his lust andRead More Jealousy in William Shakespeares Othello Essay1976 Words   |  8 PagesIt is described as the green - eyed monster. Green representing the colour of envy, and monster shows how destructive and how vicious it can be. This quotation is said by a character named Iago. Iago has a strong manipulative mind. He is the first of all the characters in the play to be attacked by the green - eyed monster. This is very ironic, Iago is warning Othello to be aware of jealousy, however what Othello does not know is that Iago is the one that is buildingRead MoreWilliam Shakespeare s Othello And The Green Eyed Monster Essay2065 Words   |  9 Pagesthe Green Eyed Monster†, he explains, â€Å"To proclaim Shakespeare s Othello as a tragedy of jealousy is but to echo the opinion of every critic who ever wrote about it† (para. 1). In this essay, the role of jealousy is examined in legendary William Shakespeare’s play Othello. Roderigo is not a major character, but he shifts from an introverted character to a wrongfully brave character because he is driven by jealousy over Othello’s role in Desdemona’s life. He lets his inner green-eyed monster cloudRead MoreOthello A Shakespearean Tragedy: An Analysis of Iagos Jealous Rage1326 Words   |  5 Pagesrelationships of almost everyone around him. Iagos anger, jealousy, and greed enable him to come up with an effective strategic plan to overthrow either Michael Cassio and/or Othello in order to get the position of lieutenant that he so desperately wants. Iago is willing to sacrifice anything and everything to achieve his goal and does not care about whom he hurts. Iagos thirst for power begins to consume whim after he is passed up for promotion and Michael Cassio, a Florentine,/A fellow almost damndRead MoreOthello, By William Shakespeare1273 Words   |  6 Pagesvillain, Iago, were a deaf mute. There is no doubt that the destruction of each character can be blamed on jealous Iago. The theme of jealousy helps propel the plot naturally and demonstrates the consequences of being morbidly jealous. The circumstantial evidence Iago provides acts like a lethal poison, which surrounds Othello in suspicion and envy but also turns him into an inhuman murderer. Jealousy is the ‘monster’ that unresonably conducts the great suffering in the story. Since Iago is overwhelmed

Financial Institutions

Question: Discuss about the Financial Institutions. Answer: Introduction: Global Financial Crisis The global financial crisis began in earnest in year 2007 through to 2009, the crisis struck hard and fast. It was a situation when major economies of the world suffered a slump in their economies affecting many industries. Many of the economies were shrinking while others literally collapsed (Anheier et al., 2008). Australia and the United States were not left behind in this crisis. In fact, the global financial crisis genesis bagun in the latter before its effects spread and was felt throughout the rest of the world. It took quite some time for the federal reserves of both countries, the IMF and the World Bank to come with concrete micro and macro economic policy measures to avoid further turmoil of these economies. Political goodwill was also required to be shown during the crisis. The economic crisis was largely contributed by the slowdown and the decline of the housing market in the US. This was led by the bursting of the housing bubble that was the pillar of the American economy. The housing bubble burst meant that more and more people could not afford to service their housing mortgages and could not be able to buy or sell their houses (Auernheimer, 2003). Secondly, globalization led to rapid growth of economies due to the world economy becoming a village. Everything was digital and global. The economic slump or slowdown due to globalization led to multiplicity effect that due to global linkages that led to intermingling and intertwining of global financial systems and economic systems at international levels. The United States and Australia were not left behind although the latter wasnt severely affected. Additionally, other factors compounded the global financial crisis such as; the continued terror war waged by the United States where most of the resources were directed to fighting terror. Other allied nations like the United Kingdom, France and others joined in to help fight the war on terror. Industries collapsed, financial markets dwindled and financial institutions started to close shop (Berlatsky, 2010). An example is the bankruptcy filed by the Lehman Brothers a, a big financial institution in America. This effect trickled down to other economies of the world where the United States dollar acted as the exchange currency. There was deep liquidity crisis causing an effect on global economy and even on global food crisis. The economy and finance of the United States were involved in a consumer spending spree and never seen before. Business for them was borrow, borrow and borrow, and do not worry, because getting money was getting easier and the value of homes was growing. The problem is based on the global economic crisis is adversely affecting all economic levels, triggering a devastating sequel in the financial and productive sectors, this research focuses on how it impacts in Europe and how to prevent a stroke Similar for this phenomenon. Increasing the competitiveness of businesses coupled with reduced public spending, encouraging savings and regulation of financial institutions can reduce the negative effects of the global economic crisis (Butler, 2009). Chronological sequence of the main events of the global crisis Faced with the worrying economic situation, European leaders are nervous about unsustainable debt that could affect the global economy. We start from the base, what is a loan?, a loan is a transaction whereby a financial institution makes available a certain amount of money, through a contract. We acquire a loan obligation to return the borrowed money within a period of time and pay a commission and agreed interests. One of the main functions of the International Monetary Fund (IMF) to provide cheap and affordable financing to members affected by balance of payments problems, if the country cannot obtain finances in sufficient amounts and on terms affordable to meet its international net payments. This financial assistance enables them to rebuild their reserves, currencies stabilization, and continued payment of their imports to restore conditions for strong economic growth while taking the necessary steps to correct minor problems. However, it negated its functions leading to global financial crisis. As strength of this region have the macroeconomic framework and inflation expectations, the exchange rate flexibility and its economic and democratic institutions, improving the private financial framework, its geopolitical situation or raw materials. However, it has a poor business diversification and concentration on the export of raw materials, a limited level of savings and continues to have a significant deficit of social integration. Latin America should be aware that after a "satisfactory" step by the crisis, speaks highly of what has been done so far and should be prepared for "difficult" times, where fiscal monetary margins and are running out. The economy and finance of the United States were involved in a consumer spending spree and never seen before (Mishkin and Eakins, 2009).. Business for them was borrow, borrow and borrow, and do not worry, because getting money was getting easier and the value of homes was growing. When we read news about what happens in international financial markets, changes in monetary policy in the US or when we hear news about political conflicts in distant regions, even those dedicated to financial issues is sometimes difficult to understand the implications this has on our daily lives. The financial world has globalized, creating intricate communicating vessels that generate phenomena that ultimately affect the country and people. Now imagine the effect of multiple stones and understand why predict how a particular financial variable will behave is a fairly complex task. Just to mention one of these important effect on the financial dynamics of people have, consider that following the 2008 crisis and its aftermath has been worldwide search to revive the economies of the countries issues (Scott, 2009). Actions such as buying bonds in the US or economic policy of the Australian government are explained, among others, and these have resulted in the systematic reduction of interest rates, impacting brutal way the growth capacity savings of families. Simultaneously, alternative investment instruments in most countries were not in vision or preference of savers are average, as capital markets in the world stock markets still account for large sectors, particularly levels means of income, elements of complexity and uncertainty of short-term (not always fully understood), leading in many cases to not be displayed as viable options.The financial markets were negatively affected. Most of the stocks were plummeting leading to loss of values of the listed companies. The most affected financial markets were the United States financial markets like the NYSE and the DOWJONES. The ASX was also negatively affected although not as much as the United States financial markets. Many of the companies that did poorly were in the energy and financial segments in the stock exchanges (Scarpetta, 2003). Many of the financial markets in the world were adversely affected. The world economy was in crumbles due to weakened financial markets. The Australian government reacted ensuring macro and micro-economic principles changed the situations. The Australian financial markets were The behavior of inflation is another factor that also presents today elements of complexity for analysis. Paradoxically, it seems that high inflation are easier to understand for people in their impacts and consequences bounded inflations, as we have had in the last little more than 15 years. This is partly a result of the perception that always causes that families are faced prices that fit into higher inflation levels, but they are diluted in the weighting of calculating inflation that result is significantly lower. This occurs for example with high settings and obvious price such as tuition. In our perception, and in many cases in reality, own resources available to spend are commonly depleted Whose Responsibility is it? It is the responsibility largely on complex financial institutions with which we coexist today, create better mechanisms to streamline the household savings; but also individual responsibility to try to understand, above the complex, the issues that affect the economic future of our families. Financial institutions mainly consist of banks and cooperative Saccos. These institutions were mostly at the core of the crisis. An example is the Lehman brothers a bank in America that filed for bankruptcy due to liquidity issues. The inflationary risks also contributed to the banks collapsing (Scarpetta, 2003). Major Banks like the commonwealth bank of Australia and the National Australian Bank reduced their workforce while others just shut down some of their branch networks. The expansion strategy was greatly hindered due to the global financial crisis. Many banks were declaring losses while the investors were not getting any return on investments (ROI). When the crisis worsened and the Fed decided to buy the so-called "junk shares" possessed by the banks, some economists rejected that as saying that if the government provided capital to banks and financial institutions, should ask in return a share in the ownership of those related companies that do not benefit from it who are responsible for the crisis in these institutions (Venardos, 2010).Respected academics and financiers in Australia and the world, proclaiming that we had entered a period of continuous expansion, where the profitability of companies would ever higher, their stock prices would rise steadily and credit could grow indefinitely above production. The last desperate measure taken by the US Government :It is a bitter irony: the Government has decided to buy part of the shares of banks in major problems, becoming de facto partner and shareholder of these banks. This amounts in practice to nationalization of US banks in the very seat of capitalism and the free market. How did this happen? The crisis experienced between 2007 and 2009 had an extraordinary economic strain.This was based on an unusual combination of global financial boom, strong expansion of international trade, bonanza commodity prices and high levels of worker remittances. This boom was the most notorious in nearly four decades; more precisely, from which the region experienced in the late 60s and early 70s was the decade of widespread boom, and in fact most benefited the economies of small and medium that the two largest the region, Australian and united states. In stark contrast to the patterns that had occurred since the debt crisis (and sometimes before), its social effects were also very unfavorable. Unemployment and poverty increased drastically; employment grew dynamically and quality in goods and services reduced and the levels of inequality in many countries increased. The Economic Impacts The economic effects of the global crisis have been profound, but only have been recognized (and knowing) with a lag. Projections of all multilateral organizations (World Bank, ECLAC, International Monetary Fund and the United Nations Organization) forecast on a contraction of these economies based on the global financial crisis. There are several recommendations required to curb the global financial crisis, these are;Firstly, well-structured financial regulatory measures- these regulations control the economic and financial proponents. The treasury and the Federal Reserve banks of Australia and the United States have the best economic minds to affect the micro and macro-economic policies. This will make it hard for the global financial crisis to recur if the policies are well implemented. Secondly, profound changes are required in the Bretton Woods system, imposed since 1944 by the victorious powers in World War II, with the free market model that is hopelessly exhausted. The bodies are mandated to help the economies of the world in their quest for economic liberation. The crisis experienced between 2007 and 2009 had an extraordinary economic strain, based on an unusual combination of global financial boom, strong expansion of international trade, bonanza commodity prices and high levels of worker remittances. The economic policies should be implemented to spur economic activities. The Governments should decide to buy part of the shares of banks in major problems, becoming de facto partner and shareholder of these banks. This amounts in practice to nationalization of US and Australian banks in the very seat of capitalism and the free market. In conclusion,the global financial crisis caused a disruption in major economies of the world where Australia and the United states were not left behind. In December the liquidity crisis and interbank mistrust take steps to make major central banks in a coordinated manner in order to support the US dollar. After a strong decline in the stock market, as European stock markets wobbled again, the Fed cut by 0.5 points the interbank rate, while maintaining the federal type (ie, lowers the price of money to banks, but not individual consumers), which causes the comeback of all European and North American places (Taylor and Clarida, 2011). The president of the Federal Reserve says that "conditions in financial markets have deteriorated" In order to maintain economic growth and consumption, the US government remained for years the extraordinarily low interest rates, lowering the cost of money and encouraging excessive spending by households and businesses. Profound changes are required in t he Bretton Woods system, imposed since 1944 by the victorious powers in World War II, with the free market model that is hopelessly exhausted. References Anheier, H., Isar, Y., Paul, A. and Cunningham, S. (2008). The cultural economy. Los Angeles: SAGE. Auernheimer, L. (2003). International financial markets. Chicago: University of Chicago Press. Berlatsky, N. (2010). The global financial crisis. Detroit, MI: Greenhaven Press/Gale Cengage Learning. Brown, R. (2011). Higher education and the market. New York: Routledge. Butler, C. (2009). Accounting for financial instruments. Chichester, England: Wiley. Carey, M. and Stulz, R. (2006). The risks of financial institutions. Chicago: University of Chicago Press. Ciro, T. (2012). The global financial crisis. Farnham, Surrey: Ashgate Pub. Dunning, J. (2000). Regions, globalization, and the knowledge-based economy. Oxford: Oxford University Press. Fabozzi, F. (2002). The handbook of financial instruments. Hoboken, N.J.: Wiley. Garside, W. (2007). Institutions and market economies. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan. Jansen, M. and UexkuÃÅ'ˆll, E. (2010). Trade and employment in the global crisis. Geneva: International Labour Office. Kettell, B. (2002). Economics for financial markets. Oxford: Butterworth-Heinemann. Kohli, H. and Sharma, A. (2010). A resilient Asia amidst global financial crisis. New Delhi, India: SAGE. Mishkin, F. and Eakins, S. (2009). Financial markets and institutions. Boston: Pearson Prentice Hall. Naas, B. and Lysne, J. (2010). Financial markets and the global recession. New York: Nova Science Publishers. Savona, P., Kirton, J. and Oldani, C. (2011). Global financial crisis. Farnham, Surrey, England: Ashgate. Scarpetta, S. (2003). The sources of economic growth in OECD countries. Paris, France: Organisation for Economic Co-operation and Development. Scott, H. (2009). The global financial crisis. New York: Foundation Press. Taylor, M. and Clarida, R. (2011). The global financial crisis. London: Routledge. Venardos, A. (2010). Current issues in Islamic banking and finance. Singapore: World Scientific.