Real Causes for US Financial Meltdown and Global Recession

March 27, 2009 - PRLog -- A recent comparison study contacted by Amlink Internationa between the great depression and current global recession unveiled the following findings.

1. Two major economic expansions led to two episodes of extreme inequalities in the United States. Both ended in severe economic crisis.

2.  When the share of total income going to top 10% group approached 50% in 1929 and again 2007, the capital market crashed in the United States. Does this suggest 50% is a threshold separating expansion and turmoil? Should we develop an inequality index as an key indicator measuring health of the capital market? Please debate.

3. It is the extreme inequality that had led house market to crash in 2007 and most likely in 1920's.

4. Government's improper interventions in the capital market before both episodes of crisis had accelerated the extreme inequalities and ultimately intensified the crisis.

5. It is author's opinion that government must focus on stabilization rather than expansion in any economic crisis. The most effective measure to stabilize a down turning capital market is direct investment. In order to do so, raising taxes on top income groups becomes necessary. Such tax increases can also reduce inequalities so to prevent bubbling economy from happening.

Full complete research article, please go to: http://www.amlinkint.com/English/global_recession_cause.html

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By: Jonathan Wang, Amlink International

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Amlink International is an international consulting firm, specializing China business consulting, China information services and China travel consulting.