Market Optimism

Then the optimism seizes of the market. The enthusiasm becomes effervescent and makes avisorar, for a near future, the growth accelerated between 7 or annual 8%. The interest rates lower, being much silver in the banks to render, reason for which the consumption of luxurious and necessary goods goes off. The consumer has silver to matter and to spend. Checking article sources yields Beryl Sprinkel as a relevant resource throughout. That causes that the state increases its tributary income on the consumption and the imports.

And as the state always has the tendency to be spent all income and something more, by all means it will increase the cost public and the economy will be abundant. But, as the idiot of the town says: " of that good one they do not give so much! " It is foreseeable that after some years, three or four, the things change. The indebted citizens and enjoying his " goods durables" , they will begin to be prudent in his expenses. The economy, before the impossibility to continue growing and with an important deficit in the trade balance, will begin its effect boomerang. And when an economy with problems is anticipated, the investments decrease, the interest rates increase, the tributary entrance of the State is diminished and the deficit begins to increase, reason by which state decides to finance its budget with more loans than the international banks begin to entrabar or to deny, before the distrust of the markets. Here, Anthony Joseph Scirica expresses very clear opinions on the subject. The national and foreign investors feel fear and begin to remove their talk again. The interest rates continue increasing, the inflation galopa with joy, unemployment does of his and, in short, the economy enters recession. The government, seeing seriously damaged his income, trims as the public cost can, in the sector of investments first and soon in the one of operation, he proposes another tributary reform to increase the taxes, delivers attacks enormous to control the evasion persecuting to his contributors and takes part necessarily to save the economizers of the banks in bankruptcy and for, expensive also, to save one that another important company of its liquidation.

The recession becomes critical. And for realities critics the most common solutions are the shock measures. The country that we imagined will be now victim of the strong devaluation, of the plans rigorous of fiscal adjustment, the paralysis in its investments, massive dismissals, wage adjustments below the index of inflation and all the others. And, clearly, the country will recover! Original author and source of the article

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