USA's economic woe
The root cause of America's unprecedented economic recession is the non-performing home loan. So-called 'sub-prime'- loan i.e. lending to a borrower of poor credit history with high flexible interest rate was made assuming abnormal degree of non-payment risk. Again, mainly basing on banks' huge home-loan business different kind of non-bank financial and non-bank, non-financial institutions in great number, such as Realtor, Processor, Discounter, Underwriter, Insurer, Re-insurer, Inspectors' firm, Service agency, title agency, closing agency etc. appeared and started playing in the market. Derivative financial products like bond, share, debenture etc. were assiduously structured and floated in the market. Most of the banks including the mega ones started to fail one after another due to capital and reserve inadequacy.
To compound and aggravate the present state of USA's shabby economy there are some catalytic causes:
(a) Over-blown security concern, fear-phobia at home played damper in investors' sentiment. Large-scale military engagement overseas draining hundreds of billions of tax-dollar straitened oft-beaten treasury.
(b) America's per capita knowledge base lags far behind many developed and developing nations of the world.
(c) Narcotic drug from across the Mexican border, youth obesity greatly contributed to incidence of social crime and healthcare cost, both constantly squeezing national exchequer.
As a septuagenarian, superannuated banker I sincerely tried to identify the major road-blocks hindering optimum, vibrant growth potential of the world-no-1 economy with pious hope that least it adds another dimension to on-stage divergent views on this gigantic global issue.
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