Business law questions - Essay Example

The first of these is the belief that the current trajectory of the economy and governmental spending models is unsustainable and will result in a crash of epic proportions once the currency loses its strength and/or a loss of faith within the monetary system is evidenced around the world. However, a secondary and more nuanced approach is that debt and budget deficits in and of themselves are not necessarily a bad thing; rather such an approach seeks to prove that as long as the economy is growing at a commensurately faster rate than is the national debt and budget deficits, then all is well.

As a function of analyzing these two approaches and drawing a level of inference from them, this brief analysis will succinctly define both of these approaches and enumerate upon the strengths and weaknesses that both portend. Firstly, with regards to the pessimists approach that the current levels of debt and budget deficits are untenable, one can look to the contrary example of Japan and many other highly developed and wealthy nations around the world to give first hand evidence of the fact that high levels of sustained debt and budget deficits are not necessarily proof that the end of the economic system is soon to be realized.

However, just because there are other nations in the world that sustain high levels of debt and continue to experience large yearly budget deficits should not be understood to mean that these factors do not have any effect at all on the overall economic strength of the system. Secondly, the alternative view supports the fact that debt and budget deficits are not necessarily a bad thing; especially considering the extant need that is exhibited within the current economy. Individuals that espouse this approach, such as Paul Krugman, believe that the government and the society at large exhibits a need that must be fulfilled during such difficult