First Decade of Millennium Draws to Close as Boom & Bust Cycles Examined
The growth of the economy during the first ten years of the 2000’s has proved rocky indeed not only for the UK, but the entire world. This decade started out with a bust and is proving to be ending with an even more impactful bust, according to financial analysts. The UK’s current £178 billion deficit is not a good sign to any eyes, especially those belonging to global financial experts. Economists have proven themselves wrong, banks have been utterly humiliated and the government itself is still in steep trouble if it is not able to pull things out of the fire according to ratings agencies around the globe.
The core problem is that the boom cycles were fueled by debt. That is, debt was taken on in massive quantities as a wager against better times ahead that never have quite come into effect to quite the same scale that was hoped for. Booms that could not be sustained lead to excessive consumer spending and the decade shows that more UK citizens than ever before have faced bankruptcy with many attempting an IVA as their only way out. While these solutions have worked for consumers, it is a telling truth that the statistics are so high now as we approach 2010 with record numbers of UK residents bearing a burden of debt that would have been unthinkable only a few short decades ago.
While Britain’s Gordon Brown helped to avoid a major financial tragedy during the Dot Com Bubble Burst, the moment the panic passed taxes were lowered and ‘investing’ (ie, spending of tax money) increased in the hopes that further economic growth could be found. Even though internet companies did not end up tanking the British economy, today we sit on the brink of an impending economic contraction that is estimated to be nearly 5%, a record not exceeded since before World War II.
Perhaps the worst part is that the UK itself is not the only nation in trouble now. Worldwide, national economies are finding themselves in severe debt. In the East, certain nations have managed to stave off severe debt and actually grow their economies, but in the West, the forecasts are bleak at best. The promising middle years of this decade have done little more than encourage consumers to max credit cards and store cards to what closes in on obscene levels. As a result, consumer specific debt has been accrued at incredible rates, leaving many the worse for the wear as lending institutions sell their debt to unsavoury collections agencies that cause havoc for those debtors left holding the bag.
As manufacturing and other base level economic activities have shifted to lesser developed nations, the UK and the US have experienced a serious accumulation of debt paired with a drop in available jobs for their citizens. While no one can be expected to accurately predict coming events, analysts remain certain that the trouble is not over and continue to endorse solutions such as the IVA or a solid debt management plan for consumers staggering under the burden of severe debt that remains a reflection of their nation’s tendencies.
