Since the beginning of this year, the world economy is unstable. Someone worried that 2008 world crisis has repeated in 2016. This economy status is very strange, because every country since 2008 world financial crisis has provided money for economy boost. It did at first appear to show the effects, but now the world economy is still in danger. Is each country’s prescription valid? I don’t think so. Because the crisis was repeated.
What is the real problem? I think that we need to approach with ideology change From 1980 to 2000, world has changed ‘free market’ ideology, privatization and labor unions, minimum wage decline and the abolition of protected labor market, reducing social security regulations, the change of politics and economy makes middle class break down and widening rich-poor gap. I think that this is a real reason which makes market crisis repeated.
Before 1980, there was different ideologies. From 1947 to 1975, the USA government significantly strengthened the rights and bargaining power of trade unions, social security system and greatly improved social safety net. Also, state universities have increased and low tuition restricted made new undergraduate students.
As soon as income inequality have been reduced significantly and labor productivity growth. Productivity and income growth to be paid in higher purchasing power has led to the long-term economic growth and prosperity.
But now, all growth results were focused on the upper levels of the rich. We should change this huge stream of the ideology.
Then, how we have to do? I think that each government has to be changed tax system radically. Overall, by using policies of Buffet rule policy and Policies to support the poor, the government has to establish well balanced tax and support policies. Through this, I believe that all classification increases its consumption, and then the consumption makes good economy status. In other words, we will make Virtuous circle of the economy. Of course, we need more specific way to make Virtuous circle of the economy.
From Seongwoong Kwon