MWP2 Outline

Introduction: All around the world there is a balance of give and take that keeps financial affairs on the fine line of growth and stability. Unfortunately, this fine line has been desperately sought after while we fight a financial recession plagued by high interest rates and un-payable debts. With that value of each global currency decreasing mixed with the higher cost of living that each country is demanding, debt and bankruptcy seem nearly inevitable.

Definitions: Financial instability is where an financial situation is overwhelmed by constant flux and setbacks. Higher unemployment rates and foreclosures within a country is an example of what financial instability could look like. It may also look like a family not being able to survive with one job due to the insane cost of living.

Review of Lit: Through each and every article financial instability and economic growth ideas were closely intertwined. To the uneducated person in this specific area it may seem odd that these two subjects are closely related, but it almost every financial situation it holds true. You cannot possibly hope to attain economic growth without the chance of financial instability. This ideal has been corrupted by major oil and credit card companies.

Argument/Analysis: Financial instability corrupts nearly every major global power. Too much power is given to the credit card companies and oil companies. This independent power brings the world to its knees. Restrictions should be made and placed on these necessary evils of our modern world so that we do not become a trade based global society.

Conclusion: Our old ways of life and old ways of solving problems cannot solve this problem that we face in our modern times. Drastic measures need to be taken to strip these corporations that cause countries to be crippled. Resistance in unison on a global scale is needed for any type of change to come.

MWP2 First Draft

Financial Instability: High Interest Rates

Financial instability may sound like an age old problem that is easily solved; but the extreme difficulty in creating financial prosperity and stability remains elusive. Too many people are worried about themselves and their debt instead of focusing on the companies that put them into debt. Banks and credit card companies should not be allowed to hike interest rates so high that it literally suffocates any individual using loans or credit cards to pay bills. Even in our financial recession, the interest rates on loans and credit cards are at an all-time high, thus making it nearly impossible for a struggling population to repay their debts.

The most dangerous threat is not the financial depression of which we are currently suffering from; the most dangerous threat is the extreme financial instability that is created by ever increasing interest rates and random inflations of prices. These prices and interest rates are inviting reckless people to take out loans and with the knowledge that they possess little chance of paying the loans back. These high risk borrowers are forcing bank companies to construct such specific and ludicrous contracts that require potential borrowers to pass a screening test to qualify for a loan. With such rigorous requirements to obtain a loan, more people are unable to receive the financial aid that is needed to build a better world.

With decreasing amounts of money being leant to the population, a countries economy is going to suffer and not grow. This implies that a country will no longer be able to maintain a modern and inventive mentality that the rest of the world is cherishing.

Loans may seem like the horrific bully of the financial crisis, but in fact credit card companies are the true culprit for much of the general public’s debt. Credit card companies are more than willing to lend money to those who are less likely to pay the debt back for many reasons. One such reason is the potential for mass gains in profit. A mass gain in profit may occur when a payment is not made on time. This late payment is automatically going to be increased by an extremely high interest rate on the next payment. This pattern of higher payment after higher payment is a formula for disaster. With payment after payment piling up, other bills also become late thus forcing a person to file bankruptcy.

Although the doom and gloom seems like a never ending abyss, measures are being taken to prevent the strangle hold that these problems impose. Attempts at restricting the overall severity of interest rates have made little affect. Even though the attempts to relinquish the grasp such companies have failed, it also means we are one step closer to winning the financial stability battle. Other possibilities to restrict the power of such ruthless interest rates could be to make a maximum cap on exactly how high they can raise their interest rates, should a late payment be needed.

Governments around the globe need to be defiant against these modern day tyrants. If they are allowed to continue on their reckless and greed corrupted paths, High interest rates on loans and other debts will ultimately cause our global economy to be set farther back than anyone ever imagined. Being set back so far could include the possibility of the global economy morphing into a trade based market. A trade based market would include the means of simply trading one person’s goods for the services of another person. This proposal alone should be enough to ratify just how drastic of an effect that high interest rates pose.

MWP2 Precis 5

In their article "A tale of two perspectives: Old or new challenges for monetary policy?" (2003), authors
Claudio Borio, William English and Andrew Filardo state that Inflation is main cause of our financial crisis. The authors strengthen their statement by providing numerous charts, credible citations and well organized research. The intended audience for this book is for people who are very educated within the field of economics. The purpose for writing this book is to furthermore identify the problem of our crisis and solve it.

MWP2 Precis 4

In his article "Finance and Economic Breakdown: modeling Minksy's 'Financial instability hypothesis'" (1995) author Steve Keen implies that in order to better understand our current financial crisis and also to solve it; we need to use Minksy's four theories of cause and effect. Keen constructs his argument by simplifying each and every theory while also correlating them with current events. The intended audience for this article is for those more economically educated. The purpose for writing this article is to inform and educate those who do not understand our crisis.

MWP2 Precis 3

In his article, "The Great Financial Crisis: Causes and Consequences" (2009), authors John Bellamy Foster and Fred Magdoff assert that if there is any possible way to pull out of our second Great Depression, it is to revisit the past events of our world. The authors support their claim by supplying ample amounts of statistics and very accurate historical events. The audience this article is directed towards is for those people who are business savy.The intended purpose for writing this article is to try and inform those people less economically aware.

MWP2 Precis 2

In their article "FINANCIAL INSTABILITY, RESERVES, AND CENTRAL BANK SWAP LINES IN THE PANIC OF 2008" (2009), authors  Maurice Obstfeld, Jay C. Shambaugh and Alan M. Taylor assert that a countries reserves and holdings influence the trade rates of emerging and advanced countries in 2008. They construct their theory by including many recent events relating them to past events. The intended audience for this piece of literature is for people who are economically interested.

MWP2 Thesis

Financial instability may sound like an age old problem that is easily solved; but the extreme difficulty in creating financial prosperity and stability remains elusive. Too many people are worried about themselves and their debt instead of focusing on the companies that put them into debt. Banks and credit card companies should not be allowed to hike interest rates so high that it literally suffocates any individual using loans or credit cards to pay bills. Even in our financial recession, the interest rates on loans and credit cards are at an all time high, thus making it nearly impossible for a struggling population to repay their debts.

Financial Instability

What exactly is the problem?

Throughout the world Financial Instability is causing repercussions that are causing extreme measures to be brought into play. More Precautions are being utilized in order to maintain financial prosperity. People are also becoming more timid about taking out loans because of the ever increasing loan interest rates that plague our receding economy.

Who is most affected by the problem?

People who are more likely to not pay back loans or other debts are the main people affected by increased interest rates and global financial instability. These people are causing a high risk to be emulated throughout the banking society. This high risk correlates to a harder process to be rewarded with a loan or other lending contracts.

What causes the problem?

A growing recession is causing people to be unable to make payments. The inability to make payments and their unethical morals are causing people to take loans out knowing they have no chance to pay them back. This recklessness is causing a gap in financial instability where lenders are hesitant to lend, causing those people who actually can pay the loans back to possibly not get them.

Has anyone tried to do anything about it? If so, why haven't they succeeded?

The government has tried to place regulations and other restrictions to protect against financial recession and instability. This is basically their way of making a back-up against any possible bad financial decisions. These unfortunately have not succeeded, obviously as we are currently fighting the recession each and every day we live.

What is likely to happen in the future if the problem isn't solved?

If the problem isn’t solved then financial collapse of a global scale will happen. If this financial collapse does indeed happen, we may drop back down into strictly a trade mentality, in which only goods are traded for services. Another possible problem that is portrayed by the issue is mob mentality amongst a countries population. If the currency of that nation does not hold true and strong, then many people will resort to violence and crime to not only be spiteful, but also to survive.

Someone should stand up and propose a drastic and effective solution to bring our global economy back from the brink of self-destruction. This proposal could include the likes of lower and more effective tax rates, more power to financial divisions to lower national debt and other possibilities.

Ch. 13 Precis of Good Reasons

In Lester Faigley and Jack Selzers' "Good Reasons: Proposal Arguments" They assert that in order to construct a successfully proposal argument, you have to follow six simple steps. The authors support their claim by identifying the six steps and defining each and every one. The purpose for this chapter in the book is to display one organized and effective way to write a proposal argument. The intended audience for this chapter of their book is for any person who is pursuing different ways to write academic arguments.