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A Tale of Two Crises: One We Missed and One We Cant Afford To by Chris Varvares
The article in question is entitled A Tale of Two Crises: One We Missed and One We Cant Afford To by the most experienced analysts in the sphere of macro economy, Chris Varvares, issued in Business Economics in April, 2010. The author discusses the reasons why the economists failed to notice the premises of the current recession providing his apprehensions about the supposedly coming crisis that is allegedly going to be more destructive and bring more aggravating consequences on the economy. Moreover, Varvares calls for immediate action on the part of the whole US society as he states that in case the economists will fail to predict the next downturn the chances are very high the economy of the USA will find itself in the deep abyss, more depressing and deteriorating than it was before.
The article is divided into two parts devoted to two issues: current and possible future crises providing extensive details in each case supported by strong evidence. Varvares clearly states his point of view providing solid and persuasive arguments. Thus, the author claims that it was economists mistake that the current crisis hit unexpectedly. It should be noted that to support his arguments, Varvares provides a number of pieces of evidences thus making the article convincing and reliable. According to the analyst, the premises of the downturn started to show long before the actual crises. Thus, the author outlines the most important triggers, from his point of view, that constitute the housing boom, explosion of subprime mortgage, and underrated leverage extent , which, as a result, resulted in the fragility of the financial system (Varvares 79). Furthermore, the author expresses his consent of the American Recovery and Reinvestment Act that was issued to boost the US economy through fiscal stimulus and large tax cuts, which is contrary to the general position (Varvares, p. 80).
The line of arguments is very cohesive and logical. The author largely relies on the facts and data collected in various surveys. In addition, Varvares presents the opinions of acclaimed specialists, Gale, Auerbach, Orszag, Engen and Hubbard who hold the same view as the author does (Varvares, p. 81). Thus, Varvares in order to support his claim about the possible future recession provides the data from the Administration projections that briefly outlines the major results the current crisis has brought, which in its turn, may serve as triggers to a new downturn. Large federal debts and deficits, increasing GDP debt, and small invest payments feature prominently in the report (Varvares, p. 81).
Concluding, the author expresses his grave concerns about the near and far future calling for immediate action, such as cuts in general and especially in health care spending, which according to the analyst, is the largest single factor pushing us toward financial ruin (Varvares, p. 82).
All things considered, it should be stated that the article is logically structured, provides a lot of evidence and facts to assist the authors arguments and is very helpful for both common people and specialists in the field of macro economy. Alongside these major benefits of the article, it should be stressed that it is written in the simple but formal language.
On top of that, regardless of the abundance of facts and information, the article is easy to read as the flow of narration is very smooth and consistent. Another important advantage of the article is that Varvares discusses the past, current, and future economic situations providing reasons for the recession that has just passed, current state of affairs, and future expectations. And finally, it should be emphasized that Varvares states opposite views alongside his own ones thus ensuring objective, unbiased analysis of the two crises.
Work Cited
Varvares, Chris. A Tale of Two Crises: One We Missed and One We Cant Afford To. Business Economics 45 (2010): 78-82.
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