Abstract This paper examines the importance of debtreduction in Canada. It argues that debtreduction is essential to economicstability because it creates 'wiggle room' or the ability to respond to economic changes. Additionally, debt servicing erodes both productivity and social programs. Finally, the relative success of the current government's debtreduction and its future fiscal policy are assessed.
Abstract This paper examines the effect of Japanese debt on economic growth. The author considers the possibility that the Japanese debt could cripple the entire world economy. Economic growth is discussed not only from the standpoint of Japan, but also from the standpoint of other members of the world economy. The author presents background information on the economic rise, and potential fall, of Japan. The paper also consists of prominent models and theories that are presented and explained, to illustrate the economic effects of the debt of the Japanese government. Paper includes charts and tables.
Outline:
Abstract
Theory
Data
Conclusions
From the Paper "In order to put the significance of the consideration of Japanese economics into perspective, consider for a moment the fact that Japan is the second world economic superpower, behind the United States (Witter, 1997). Keeping that in mind, there are several key economic indicators that show a true storm brewing within the Japanese economy due to the debt of the Japanese government; for example, current figures show that the debt of the Japanese government outweighs their GPD (Gross Domestic Product) by an obscenely high 170%, the Japanese National Bank is insolvent, and there is a glut of outstanding JGBs (Japanese Government Bonds (Posen, 2000). While all of these statistics are staggering, there are some very informative models and theories that illustrate this problem in greater depth; the best of these models and theories will now be presented and discussed in an effort to add another dimension to this research and provide a complete understanding of not only the topic, but also its significance to everyone in the developed world and beyond."
Abstract This paper reviews the impact of debt relief on domestic social, political and economic situations. According to this paper, the external debt situation for a number of low-income countries has become extremely difficult in recent years, prompting the IMF and the World Bank to design a framework to provide special assistance to the heavily indebted poor countries (HIPC).
Contents:
Introduction
Challenges and Future Policies
Diagnosis and Reflections on Poverty Reduction Policies
Poverty and Recession in Sub-Saharan Africa
Africa Deprived of Its Inheritance
The Urban Dynamics: Cities Suffer Most
Policy Design Post Evaluation
Conclusions
From the Paper "As for the implementation of the strategies, the principle of participation from different members of society opens up new prospects that will have an impact on the way national affairs are led. By favouring respect for the right to information and expression, participation fulfils one objective in that it deals with one of the key factors of poverty, namely exclusion and marginalisation. But the potential impact of this precept goes way beyond this aspect. Participation will only take on its full meaning if it really helps solve the problem of the lack of democracy in poor countries. It should give extra capabilities and power to intermediate bodies (the media, trade unions, associations, etc.) in drawing up, monitoring, controlling, assessing and redirecting the policies. Information is of course of utmost importance in this respect, and its formative nature must be underlined. It makes public choices explicit and increases transparency in the management of state affairs, whilst offering the different players in society the possibility of exerting pressure, or even taking sanctions in the case of failure. In short, making the state accountable for its actions before its citizens is at stake."
Tags: bank, debt, domestic, economics, gdp, gnp, imf, implications, relief, world
Abstract This paper explores borrowing by corporations from the micro and macro perspective. First, the paper considers the influence of increased debts on the efficiency of the firm, explaining that proponents of high leverage claim that debt increases firm efficiency. Second, the paper looks at the macro issue, which is the impact of increase corporate debt on the stability of the country's economic and financial system.
Micro Issue: Does Debt Promote Efficiency?
The Macro Issue: How Does Debt Affect the National Economy?
From the Paper "Corporations usually prefer to use debt as a source of finance because of the tax advantage offered by debt financing. Interest payments made by a firm are tax deductible while dividend payments are not. However, in case of debt financing a firm is also exposed to the threat of bankruptcy and reorganization. According to the traditional view, maintaining the optimal ratio of debt to equity allows the firms to avoid such threats. Recent studies have focused on some other benefits that a firm may drive through increased debt financing."
Abstract This paper examines methods whereby US homeowners' debt load can be reduced and ultimately eliminated while building wealth as homeowners. To this end, this paper provides an overview of the current financial situation facing many Americans, followed by an analysis of how some people have approached these dual goals. A summary of the research and salient findings are provided in the conclusion.
Outline:
Introduction
Review and Discussion
Background and Overview
The Path to Debt Elimination and Wealth Accumulation
Debt-Reduction and Wealth-Accumulation Strategies for the Whittingtons
Conclusion
References
From the Paper "On the one hand, the need for debt elimination strategies is more pronounced today than ever. Many American families that have worked diligently for years now find themselves little better off - or in many cases worse off - than they were a decade ago. In fact, in the United States, almost one-half of the wealth is in the hands of just 3.5 percent of the households, and the majority of the other households do not even approach the upper levels (Stanley & Danko, 1996). In this regard, Reich (2001) reports that, "The dirtiest little secret about the Roaring Nineties is that average working families gained almost no income, while their health care costs soared. From 1986 through 1997 (the latest year for which detailed IRS data are available), the average income of the richest 1 percent of Americans rose 89 percent, to $517,713" (p. 56). During this same period of time, though, the average income of the bottom 90 percent of Americans increase a meager 1.6 percent, to just $23,815 after all federal income taxes were paid (Reich, 2001). At the same time, healthcare costs increased even faster than inflation, a trend that especially affected middle-income Americans families; by the end of the 1990s, fully 44 million Americans lacked health insurance, almost 8 million more than those without health insurance a decade earlier (Reich, 2001). Furthermore, by the end of 1997, even those who were insured paid substantially more, through higher co-payments, deductibles, and premiums (Reich, 2001). Likewise, consumer debt because of credit card use is at an all-time high, and Brown (1999) suggests that, depending on their personal circumstances, consumers should first eliminate this source of debt as a debt-reduction strategy because of the exorbitant interest rates involved: "[Consumers] should carry out an aggressive debt-reduction strategy over the next three to five years in order to eliminate their outstanding debt. Otherwise the interest from their credit cards will erode the profits from any portfolio. Earning 10 percent to 12 percent on your investment portfolio and paying out 18 percent to 21 percent in consumer debt doesn't help you realize a profit on your portfolio, no matter how well you are invested" (Brown, 1999, p. 60)."
Tags:debt, elimination, wealth, accumulation, mortages, retirement, budgeting, homeowners, middle, income
Abstract This paper addresses the significance of debt with reference to three African countries namely, Angola, Benin and Liberia. It suggests possible ways in which these countries can solve their debt problems, including restructuring of debts.
Tags:debt, debt crisis, sub saharan africa, default, world bank, debt repayment, economic reform, dictatorships, socialist, civil war
Abstract This paper briefly discusses the role of tourism in promoting economicstability. It discusses the contribution of tourism to gross domestic product (GDP). The paper briefly looks at the the Overseas Economic Cooperation Fund and how it has agreed to offer special loans to the tourism industry in the hope of reviving it in Japan.
Table of Contents:
Economic Sustainability
Economic Sustainability and Tourism
Contributions of Tourism to GDP
From the Paper "The touristy industry has been approached from different standpoints across the globe. There are the countries which exploited it to the maximum and registered significant gains from attracting foreign tourists, and consequently investors. There are also those countries which focused on other industries. As a general tendency in the contemporaneous society however, most emerging countries try to consolidate their touristy industry. "Tourism is one of the fastest growing sectors of the global economy and developing countries are attempting to cash in on this expanding industry in an attempt to boost foreign investment and financial reserves" (Pleumarom). And to make sure that the gains will also be present in ten or twenty years, the governments and the organizations develop and implement programs based on economic sustainability."
Abstract This paper explains that "The Economic Consequences of the Peace" is an important text for understanding Keynesian philosophy as viewed in an international, as well as a national perspective and to understand Keynes from the point of view of his early development as a economist. The author points out that these proposals were unique and radical solutions to the conventional assumption that the loser of a war must be economically ravaged in reparation for its ills. The paper relates that Keynes believed that the existence of the "Great War" debts was a menace to financial and political stability everywhere; therefore, the debt must be forgiven, contrary to conventional economic wisdom at this time.
From the Paper "Another key aspect of later Keynesian theory was the need for maintaining economic infrastructures, rather than breaking them in revenge, and that cash infusions in the short run reap dividends for all in the long run. Keynes always took a long term rather than a short-term view of economic policies. The current policies against Germany only satisfied short-term emotions, but could cause long-term economic destruction of a major power and thus injure the world."
Abstract This paper examines the dimension of Kenya's national debt. It describes the enormity of the debt in human terms, as the author writes that the cost of paying just the interest alone on the debt is far larger than what the government spends on healthcare. The paper investigates the true motives of the Poverty Reduction Strategy.
Table of Contents
Introduction
Poverty Reduction Strategy
Purpose of the Poverty Reduction Strategy
Political Consequences
Political pressure by IMF
Internal violence
Conclusion
In Text Citations
From the Paper "Africa spends four times more on interest on her loans than on healthcare.
"The issue of Third World debt is one that cannot be ignored or wished away. In just 10 years, it escalated from a little over $400 billion in 1980 to a staggering $1.3 trillion in 1990. Kenya's eternal debt is more than $7 billion". Nairobi (The Nation, October 13, 1998) ""
Abstract The paper explains why oil shortages and price hikes in oil result in recessions or depressions in the American economy and why, as the U.S. continues its dependence on oil, she becomes more in debt, weaker in the global market and more susceptible to rising oil prices. The paper therefore contends that the U.S. is contributing to its own demise by encouraging economic instability and a growing trade deficit that is threatening its security. The paper discusses in detail the green solution to energy and how it will not only stabilize the economy and boost it with future jobs, but will also protect the nation's security.
From the Paper "To understand the real dependency on oil for each American, Americans need to understand how the financial welfare and the national security of the United States is dependent on oil and oil prices. Although Americans could consider the current crisis in climate change as a reason to cut down on their consumption of oil, the most prominent reason to rid themselves from their dependency on oil has to do with the economic stability and the national security of the United States. Because of their dependency on oil, Americans will continue to experience inflation at an accelerating rate, an increase in their trade deficit, and an a weakening in the value of the dollar. The fact that oil is a finite resource derived in the dangerous region of the Middle East that continues to raise the price of gasoline, heating, and other energy commodities, makes that Americans will need to change their life styles permanently."
Abstract This paper explains that Argentina enjoys a wide range of natural resources, a highly literacy rate, an export-oriented agricultural sector, and a diversified industrial base; on the other hand, the country has suffered recurring economic problems of inflation, external debt, capital flight, and budget deficits over the past 10 years. The author points out that, unlike the rest of the continent to the north,which lies within the tropics, Argentina lies almost completely within the temperate zone of the Southern Hemisphere. As a result, the country enjoys excellent weather. The paper concludes that, notwithstanding the Argentine government's history of poor economic management practices, it appears things are looking up; investors at home and abroad may look at Argentina in the future if the government can just avoid the same types of mistakes it has consistently made in the past.
Table of Contents
Introduction
Review and Analysis
People/Population
Climate and Geography
Historical Development
Major Development
Social Indicators
Economic Indicators
Recent Economic Performance
Economic Crisis
Economic Ties with the Rest of Latin America
Recovery Strategy Needed
Future of Argentina
Conclusion
The World Bank Group Competitiveness Indicators
From the Paper "The government efforts to achieve a "zero deficit," to stabilize the banking system, and to restore economic growth proved too little too late and the peso's peg to the dollar was abandoned in January 2002; the peso was floated in February 2002 and the exchange rate plummeted and inflation skyrocketed. By mid-2002, though, the economy had stabilized but at a lower level than previously. A strong demand for the peso caused the Central Bank to intervene in foreign exchange markets to constrain its appreciation in early 2003. Further fueled by precedent-setting export levels, the country's economy began to recover with output up 5.5% in 2003, unemployment falling, and inflation sliced to 4.2% by year-end 2003."
Abstract It analyzes the links and contradictions between pursuit of low inflation and debtreduction. It also considers the political-structural problems in Canada that influence fiscal policy.
Abstract The paper argues that even with the overwhelming popularity of African debt relief among policymakers and the public, debt relief is a bad deal for the world's poor. The paper discusses the IMF's initiative and the G8's debt relief plan and shows how they are effectively making African economies choose between trade liberalization policies of the World Trade Organization (WTO) or insurmountable debt and economic collapse. The paper contends that instead of supporting independence and development, WTO mandates foster increased dependence and perpetual underdevelopment. The paper also notes that foreign aid sent to developing countries rarely reaches the people who need it since the real problem is not high debt burdens, but rather corrupt governments. The paper concludes that ultimately, debt relief will only help reduce debt burdens if government policies make a true shift away from redistributive politics and toward a focus on economic development.
From the Paper "The continent of Africa is filled with some of the poorest nations in the world. Desperate poverty and unimaginable debt levels are due in part to previous acts of corrupt governments, inability of leaders to properly handle money and spending, and simple bad economic planning. Weak economies, unwise spending, huge amounts of borrowing and mishandling of natural resources have all but crippled a large number of African nations. And finally economic shock, "poorly designed reform programs and the [shady] action of creditors have all played a decisive part in the debt crisis," (Raceandhistory.com)."
Abstract The paper explores how cutting taxes may ultimately be an important strategy in reducing the federal debt of the United States. The federal debt has been a long standing concern of American citizens, politicians and economists. Today, the federal government faces a projected gross federal debt of $6,118,364 million in 2005. The paper shows how governments have traditionally taken the stance of increasing taxes or cutting spending in order to reduce the deficit. These attempts have largely failed due to unanticipated budget concerns. It explores how, in traditional attempts to reduce the debt, cutting taxes was thought to be a way to decrease national revenues, thus potentially increasing the debt. However, many economists are now considering that cutting taxes may help to stimulate the economy, paradoxically resulting in increased taxation revenue through higher employment and better wages. The paper examines how tax cuts may prove to be a way to increase revenues, thus potentially providing a means to reduce the federal debt. It also examines President Bush's Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA, designed to cut taxes, reduce the debt, and stimulate the national economy.
From the Paper "Critics however, argue that EGTRRA will ultimately fail. They note that misrepresentations in federal budgeting overestimate budget surpluses, including mistakes in long term costs of retirement programs from a budgeted $5.6 trillion to a mere 1.6 trillion. Further, they note that EGTRRA will reduce revenues through tax cuts. Ultimately, the critics argue that the combination of a decreased budget surplus and tax cuts will sink the EGTRRA (Gale and Potter).
If the critics are correct, and the EGTRRA fails, the government will be forced to increase taxes, reduce spending, or increase the public debt. As such, plans to reduce taxes may once again result in increased federal debt."
This paper examines the real reasons behind the debt crisis faced by developing countries, focusing on the structural reasons for their continuing debt before turning to possible solutions.
Abstract Reasons for international debt are discussed with examples brought from Mexico and Brazil, oil exporters and oil importers; debt rescheduling; debt relief and first-world aid; the International Monetary Fund and the affect the IMF has had on poor countries. The two major methods of international reserve creation: the mining of gold and the acquisition of reserves in the form of key currencies are discussed along with their problems. Recent structural adjustment and debt relief are also examined, as well as the inability of poorer countries to pay their scheduled debt service and the Heavily Indebted Poor Countries Initiative and its problems. This leads to a discussion of macro-economic adjustment.
From the Paper "The current climate of recession has highlighted the reasons for raising the calls for poor country debt relief. It is difficult to believe claims made by creditors that they cannot afford further debt relief. Canceling effectively unpayable debts owed by the poorest countries may turn out to be a sensible policy for all creditors. As well as the strong moral argument for debt relief, there could be sound financial grounds for doing so to stimulate the global economy and promote growth."
