The recent six monthly report published by the International Monetary Fund has pointed out a big danger which may loom at the end of this recession.
No matter how much or little you read of the papers, you will be aware that this recession was primarily triggered by the subprime market in the US. And once the first problem came to light – the failure of the lenders who issued the mortgages in the first place – they started toppling like dominoes.
Since that first started happening towards the end of 2006, many people have stated that things cannot go back to the way they were before this huge crisis hit. Many have also voiced their displeasure at the huge bonuses enjoyed by bankers and others in similar positions. This was one of the reasons why the first major recession of the 21st century occurred.
And this is the main reason why the IMF has felt the need to voice its concern over where the world will go after this recession comes to an end. One main worry is that the economic climate is easing a lot sooner than people thought it would. If anything is going to lead to a complacent outlook, it is this. There is the possibility that those in positions of power and influence will think we have actually got away with things rather more easily than they thought we might.
It is abundantly clear that if we were to go back to our old habits, the same situation will eventually rise up and attack us once more. And this is precisely what the IMF is sending a warning about. There has been talk about reining in the huge bonuses of the banks – many of which have contributed to the recession, rather than helping to solve it. But there must be more than just talk if things are to change for the better.
It’s much like dieting. It’s not enough to say that from tomorrow you are going to start exercising and eating more healthily. Nothing will actually happen unless you do what you say you will. And the same applies to the global economy. There were reasons why this recession occurred in the first place, and if those reasons are not attended to they will probably lead to another recession happening all over again.
It is now up to us to be pro-active and make sure we make the changes that need to happen. It’s small wonder that so many commentators and spectators are questioning whether or not this will actually occur. Only time will tell, although those in power should be sure to take this time to do whatever is needed. Only by figuring out which changes will benefit us and bringing them into play as soon as possible will we avoid a repeat of this happening at some point in the future.
We must not be fooled by the feeling that this recession may not be as long as some feared. If we are, we will end up seeing it again sooner than we want to.