The Global Economic Crisis and its Aftermath

The global economic crisis is a period that occurs worldwide during which economic difficulty is experienced by both consumers and markets. The ongoing crisis began in July 2007 in the US and continues to be felt across the world. Although this is a period that consumers and governments as a whole will operate with a lot of caution and limit their spending on goods and services, it is important that such limitations be eliminated. The best way to tackle a global economic crisis of any magnitude is to increase money circulation into the economy through spending so as to cushion on the harsh impacts of the crisis.

A case in point that accentuates this position was the move by the Australian government in 2009, right at the pinnacle of the global economic crisis, to implement a stimulus plan that saw close to US$27 billion being pumped into the economy to boost virtually all the sectors (Pannett para 2). It is prudent to point out that Australia, unlike other large economies such as Italy and Spain, survived the scare of the crisis owing to this bold economic move.

In particular, the stimulus program saw the education sector receive a huge funding to aid in the construction of libraries, halls, and indoor sports facilities, while housing, community infrastructure, as well as small businesses also received huge support.

Proponents of limited spending, however, rightly point out that the situation could be tough for some other economies, and the only way out for such affected governments is to limit spending only on important sectors. Thus, the government would elect to focus its attention more on such sectors as health care, credit, and education, and give a wide berth to the biting effects of the economic condition. The underlying reason for this cautionary move is to sustain continuity while at the same time allowing the economy some time order to pick up. Although the other sectors left out of the plan, such as infrastructure, are significant in stimulating growth in any economy, the actual fact that they require huge spending in almost one go implies that the economy could suffer even worse repercussions if it chose to take that path. On the other hand, a boost on the lending sector would revitalize the capacity of the banks to hand out credit to businesses and firms. This will in turn witness their stabilization in the face of worse economic situations, and consequently guarantee jobs and employment.

In summary, the global economic crisis which has been ongoing since mid 2007 can effectively be handled using two alternative methods. Firstly, increased spending especially by the government in virtually all the sectors will see an increase in money circulation within the economy, and consequently cushion against the ramifications of the harsh economic conditions. The Australian government successfully implemented a stimulus program in 2009 that played a crucial role in mitigating the effects of the crisis. Today, Australia stands out as among economies that emerged unscathed by the economic crisis. Alternatively, governments could still limit their spending and instead only focus on sectors of greater importance, such as healthcare and credit finance. This precautionary move, however, would leave out other sectors which, although they bear great importance to the economy, are too expensive to sustain in the face of the biting economic crisis.

Pannett, Rachel. "Australia’s Senate Approves Stimulus Package". The Wall Street Journal, 13 Feb, 2009. Web. Sep. 27, 2012, http://online.wsj.com/article_email/SB123449330683880761lMyQjAxMDI5MzE0NzQx OTczWj.htm