The Theory Behind: Rectified Prevalence Presented by sAshleh co.

The unemployment rate is hovering at 25%...The risk of poverty is at 35%...The net household income is half of the average European income...

Over 30% of 16 to 24 year olds and over 20% of a ll people in Greece are suffering from severe deprivation...As opposed to the 5% in the rest of Europe...Suicide rate increased by 20% in the 4 years following the economic downturn.

"Such a complex and keenly felt human and social crisis" -Pope Francis

More than 120,000 professionals including, doctors, engineers, and scientists left the country after the crisis began in 2010.

(Ash)

“Greece is in its own Great Depression. But unlike the United States, it won't be able to get back on its feet as quickly,” -Jacob Funk Kirkegaard

Uneven Distribution of Wealth

"What has destroyed every previous civilization has been the tendency to the unequal distribution of wealth and power." - Henry George

Agricultural Overproduction Deficits

Issues With Buying on Margin

People were buying with unprotected money they didn't have, these funds were primarily poured into stocks. Increase of people buying speculative stocks eventually led to the stock market crash

Dec 5, 1929 "The Governments business is in sound condition." -Andrew W. Mellon, Secretary of the Treasury

Bank Runs

(Adam)

Greek Debt Crisis

From 1999 to 2008, private sector debt as a percent of GDP more than doubled from 59% to 126%.

Greek banking establishments were quick to lend people money which led to the collapse of the banks to the point where people couldn't withdraw more than 60 euros.

There was a high trade deficit caused by more imports than export.

(Ash)

"Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body - the producers and consumers themselves." -Herbert Hoover

Market Equilibrium

  • Supply shifted in-proportionately in relation to demand
  • Intended function of supply-side vs what actually happened (agricultural crisis)
  • Aggregate supply outran demand causing price shifts
  • Predatory pricing (undercutting) caused the market to dip even further
  • New market equilibriums cause major decreases in consumer cash flow back into the economy

Circular Tendency of the Economy

Hoover's Response

  • Volunteerism: the use or involvement of volunteer labor, especially in community services.
  • Rugged Individualism: The belief that all individuals, or nearly all individuals, can succeed on their own and that government help for people should be minimal.
  • Localism: Generally, localism supports local production and consumption of goods, local control of government.
  • Hawley-Smoot Tariffs: Retaliatory tariffs by America's trading partners helped reduce American exports and imports by more than half during the Depression

(Adam)

FDR's New Deal and The Great Depression

FDR lowered un-employment rates using pump priming (government funded civil works projects).

CCC, WPA, PWA

FDIC instilled trust back into investors because of insuring deposits for up to 5000$.

Lasting Effects of the New Deal

  • Social Security
  • Electricity in rural areas
  • unemployment decreased
  • Great Depression ended
  • Solved agricultural issues and shifted government philosophy out of laissez faire

(Ash)

"The point in history at which we stand is full of promise and danger. The world will either move forward toward unity and widely shared prosperity - or it will move apart." - Franklin D. Roosevelt

Keynesian Economics and Rectified Prevalence in Greece

Keynesian economics proved to reverse government deficit in circumstances congruent to the ones taking place in Greece.

Initial Issue and Solution

The Grecian debt crisis can be traced back to the billions in foreign loans being directed into repaying international debts.

By using rectified prevalence the cash flow will be channeled into market subsidies and therefore back into the hands of the Grecian constituency.

As seen in the graphs before; this step will spark a circular flow in the economy and stimulate the country's overall GDP growth.

(Adam)

Think Smart. Think Right. Think Sashleh Co.

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