More than five years after the financial crisis hit its peak, the world is still far from recovering the ground lost. Tens of millions of people in the wealthy countries of North America and Europe remain unemployed or underemployed as a result of the collapse of the housing bubbles that drove their economies before the crisis.
This downturn has robbed workers of the opportunity to have a decent job and the income necessary to raise their children. It has also resulted in trillions of dollars of lost output. Millions of workers who could have been employed improving our infrastructure, making our homes and businesses more energy efficient or better educating our children have instead been left idle.
According to the dominant strand of economic thinking in policy circles, if not also academia, this suffering was necessary because of the sins associated with the inflation of credit bubbles in the lead-up to the crisis. Their bursting threw budgets out of whack, causing large government deficits. The conventional wisdom in Brussels, London and Washington is that governments must focus on reducing their budgets in order to reduce their debt to more normal levels and lay the basis for renewed growth.
Source: Aljazeera
