How the Economic Downturn is Hurting Everyone

     The US downturn is affecting every one and every sector of the economy because the current world economy is highly integrated. In fact it is no longer the US downturn rather it is more appropriately global down turn. The current crisis is hitting the laborers in China and India as much as the automobile workers in Detroit. The European and Russian firms as well the outsourcers and the outsourcing destinations are all impacted alike. The loss to Dow Jones industrial average value is 34 percent within the last 12 months while the investors have found their wealth eroded to the extent of $6 trillion. The economic guillotine has not spared Germany’s DAX 30 index and Tokyo’s Nikkei index 225 either. Their falls were 40 and 42 percent respectively. The share prices in Shanghai dipped to the extent of 65 percent while the Moscow’s investors watched in utter helplessness as their shares slid more than 70 percent forcing the stock exchange to close temporarily.

     No wonder, economic salvage is the number one priority of Barack Obama with Exit polls showing 85 percent of the Americans worried about economic slowdown. With service sector almost collapsing, more than 157,000 jobs disappeared in the month of October alone, according to Guardian.co.uk datelined 6 November 2008. Obama’s treasury secretary will be expected to spend approximately $800 billion bail out package as their first official action. The house speaker Nancy Pelosi has already indicated her preference for a $100 billion package designed to create employment through building transport links, schools and public utilities. Further, food stamps for the poor apart from relief packages for indebted people and a fresh tax rebates are the other steps on the agenda. 

     Barack Obama has already indicated to the Congress the urgency needed with his bail out package “American Recovery and Reinvestment Plan” designed to save as well as create more than 3 million jobs. The investments are expected to be made in a number of priority areas including education, health and energy among others. Obama’s package is expected to double the production of alternative energy within the next three years. The plan will see enhanced investment in science and technology, schools with 21st century class rooms, and broadband expansion across the nation. With American economy back on rails the other economies too are likely to profit. The industries, banks and the financial institutions that will recover will have a rippling impact on ancillary industries across the globe. The demands in America will create growth else where. The textile workers, the motor part industry workers, the workers dependent upon outsourced economy will experience a fresh demand impact that might see the closed units in the developing nations back into action.