The deficit increased to alleviate the consequences of the 2008 crisis threatens the economic recovery and the welfare state in the U.S. and Europe.

The economy, like any other human activity, should not wait to see their problems or deficiencies emerge for just try to alleviate or prevent its causes, especially if they are to verifiable and scope of economic activities will eventually reach the rest of human functions.

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The current global crisis and its effects and future

The causes and consequences of the current global crisis only serve to show that, for if the former are known to be recurrent phenomena according to a study John Galbraith, Treating the latter is entailed significant increases in public debt with significant effects on deficits of countries. Which are footing the bill for rescuing bankrupt private financial companies and ultimately considered important to countries like Greece, Ireland and Portugal, with the consequences this holds in the present and future welfare of the citizens who have had little or nothing to do with causing it.

Free market, Adam Smith and crisis “subprime”

The 2008 crisis, more precisely, recall that was the outcome of the fraudulent financial mess mortgages subprime, Expressing both the predominance of a free market conceived as the becoming uncontrolled appetites for individual economic benefits generally short term, on the other hand it was further evidence of the need for things continue like this in a civilized society and economy. At least until the market prevail in the guidelines devised by the Physiocrats and Adam Smith The Theory of Moral Sentiments , 1759 or Essay on the Nature and Causes of the Wealth of Nations 1776, and thus the consequences of the act of the “invisible hand” not adversely affect tend to humanity or the environment.

States, World Bank, IMF and EU to the rescue of companies and countries

Otherwise, it will remain a historical constant that recurrent nature of the economic and financial crisis and governments and institutions like the World Bank (WB), International Monetary Fund (IMF) or the European Union (EU) will continue to act with private entities important and some countries to the brink of bankruptcy as would a responsible parent with a child in trouble for the sake of maintaining the general welfare of the family.

The debts will grow as more economic crises appear

This, precisely, has been in recent years the reason for the increase fiscal deficit debt and in some cases alarming proportions in the United States of America and in countries of the periphery of Europe (Portugal, Italy, Ireland, Greece and Spain jointly referred PIIGS English) whose sustainability, however, depends on the consistency common currency, the euro and the stability of the European Union.

Italy and Spain to the threat of speculation and the market

In Greece, Ireland and Portugal this situation has already led to financial insolvency problems ransom demanded by the World Bank, IMF and the EU, and the Hellenic Government to negotiate a second loan that has been given by the German position. Meanwhile, Spain and Italy are discussed at a national and EU political crossroads, fed back to the speculative attack as a result of the free market operate, which may place them in a similar situation.

Welfare state and economic recovery threatened by debt

Which together with the delicate situation similar to the first economy in the world EE. States., In the short term tend to compromise the global economic recovery and long term care of basic social needs in Europe have had considerable importance through the much-vaunted welfare state. In times when otherwise there is a debate in that country political and economic to increase even more, the level of public debt from already large and historic in the U.S. economy, whose effects can impact the world in ways still not well predictable.