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Why the Euro Crisis Is an American Problem - Assignment Example

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The Euro crisis is an American problem, and American nationals should worry about it. Majority of people do not understand the implications of the disintegration of the European currency that is common to seventeen nations…
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Why the Euro Crisis Is an American Problem
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Why the Euro Crisis Is an American Problem

Download file to see previous pages... It is estimated that the collapse could generate a 25% decrease in Europe’s gross domestic product (GDP). In effect, the euro crisis would represent a Great Depression of the current century, and this would be a threat to the global financial system (Zuckerman, 2011).
According to Frum (2011), if the Euro falls, bonds will lose value in the European banks. This is because banks in the European region hold euro-dominated bonds. The bonds will lose value such that the banks will be forced to either seek assistance from the government, or put to a stop their lending to individual consumers and/or businesses (Frum, 2011). The fall of the euro will adversely affect other nations like Canada and the United States. For one, the financial institutions in Europe may lose their capacity to repay creditors in the United States. The net effect of the crisis will be more pressure on the financial system of the United States. Yet again, it should be considered that majority of the investors in the United States are from the euro zone , and if the eurozone economies fall, the Americans will have a difficult time raising capital for their businesses and new projects (Frum, 2011).
The genesis of the crisis is very clear. Just like the United States, Europe was a victim of over-leveraging. The past decade has seen the European Central Bank overseeing easy credit, cross-border lending, and low interest rates which was instigated by a property boom and the increase of debt in households. The bubble has already burst, and the outcome has been the risk of failure to negotiate currency defaults and a series of frighteners (Zuckerman, 2011). It is worth noting that the majority of the Americans see the euro crisis as a crisis generated by government debt and government deficits. The same can be true of Greece, but it is not certainly true of France. If the Euro falls, each nation in the European region will be forced to have its own currency. This means that each nation will have to pay its debt using its own currency and not the euro (Frum, 2011). Europe’s option to avert the crisis is either to stop using the euro to restore each government to its own currency or to develop a single pan-European government to manage the new pan-European currency. Both options are not attractive to the United States. The United States has no option but to either suffer from the first option or contribute in support of the second option. Both options will have a considerable effect on the United States, and thus, the American cannot escape the euro crisis, it is their problem. Question 2: State Based Teaching Incentives to Improve Quality of Education Offered to Public Schools For a long time, the focus of the policymakers has been on improving or enhancing teacher quality. In the past few years, most reform efforts or initiatives have included strategies to enhance the overall quality of teachers and the equitable allotment of teachers within states, districts, and schools. The federal government endorsed an act in 2001in respect of education. The No Child Left Behind Act of 2001 is aimed at ensuring teacher quality and fair distribution of teachers. The act demands that all states evaluate the allocation of teacher quality, create, and implement plans to enhance teacher quality and assure fair distribution of quality teachers (Fuller, 2010). In the past, local districts have been designing and supporting their individual recruitment programs. This isolated approach generally develops inequities across the states. This is because ...Download file to see next pagesRead More
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