Trawling through the TKI pages, WASSA noted that the Social Studies Online materials are being removed at the end of this month. This is both sad and good news. WASSA is sure that many teachers have scoured these pages in order to plan their own social studies units of work. Having something to start with is always a great springboard before modifying and adapting units of work to suit local needs. So get in there quick if you want copies of resources that you think might be valuable.
Presumably this decision is a signpost that the long promised revamped pages for the social science community (reflecting recent curriculum change) are soon to arrive. This should be good news as it is very important that fresh ideas become available, particularly for a subject in which contemporary issues are such a significant feature.
A review of New Zealand social issues in the last couple of years might lead to the development of units based around questions such as:
What can we learn about the law making process from the 'Anti-Smacking Bill'?
Is the hosting of the rugby wold cup likely to be susainable?
How has climate change sparked Kiwi innovation?
How has the recession impacted on economic decision-making?
What does the Cadbury's palm oil saga teach us about producers' and consumers rights and responsibilities?
Recession crib sheet: intended for use with year 10s - but like all resources adapt and format it to the level that you think is ok for your students.
ReplyDeleteFurthermore, you will need to give students the chance to process it through comprehension strategies etc which may extend over 1-2 lessons.
Two Major Causes of the Current Global Financial Crisis
AO: Understand how economic decisions impact on people, communities and nations (L 5)
1. American Debt
On the positive side, debt represents opportunity: people can afford more possibilities in their lives. On the negative side, in the case of inability to repay one’s debts, they not only become the borrower’s burden, but also impose a cost upon society.
American debt grew at an alarming rate, on both the governmental and personal levels. In 2007, the federal budget deficit was at an enormous 8.8 trillion USD and growing. But the problem ran deeper than that. What most people failed to realize was that the United States was subjected to two debts, both of which led America towards a financial meltdown.
Personal insolvency and indebtedness were also major becoming problems much recognized in America.
A. Government Deficits
i. Federal Budget Deficit
As previously mentioned, the 2007 federal budget deficit was at 8.8 trillion USD and growing. This roughly amounts to be $30,000 of debt per person. Numbers are superficial. But 8.8 trillion dollars is hardly something to be dismissed as just being “just numbers on paper,” as put by President Bush. Perhaps more importantly, without any fundamental changes with regards to how the federal government spends and saves money in the near-future, this debt would only continue to grow, as huge tax cuts by the government coupled with enormous spending caused high government deficits.
ii.Current Account Deficit
Another problem facing the United States was the current account deficit. Essentially, the current account balance is derived from the import/export ratio between the United States and the rest of the world. A nation that consumes more than it produces must borrow from overseas. In the year 2006 alone, the US imported $1.869 trillion while having exported only $1.024 trillion, resulting in a current account deficit of $862.3 billion USD.
B. Household Insolvency
Personal insolvency became a rising problem in the United States. While Business bankruptcies remained relatively stable between 1980 and 2005, consumer bankruptcy has risen dramatically from 300,000 to almost 2,000,000 in the same time period. A recent study done in Purdue University that examined the various causes of personal bankruptcy found that while divorce, job loss, and medical reasons constitute some of the causes, the top cause for personal insolvency is simple “overextension,” or households simply sinking into debts consuming more than they can earn.
How do personal insolvencies affect the wider economy? Besides the direct relationship between bankrupt families and their inability to consume or to invest, their unpaid funds become liabilities in the hands of their creditors, such as banks, credit card companies, financial companies, etc. Rising insolvencies eventually lead to higher costs for such institutions, which in turn results in either higher interest rates being charged -- thereby crippling consumption for those with low credit -- or higher rates of insolvencies among institutions that essentially form the financial backbone of the economy.
Second half of Crib Sheet:
ReplyDelete2. Dangers of the Housing Bubble
Increasing foreclosures, decreasing home sales, decreasing housing prices are all symptoms of a weakening housing market, which can have a seriously negative impact on the economy. Whenever a mortgaged property is used as asset to be borrowed against in the purchase of consumption goods, the risk becomes greater. Essentially, the borrower is borrowing against something he does not completely own, hence increasing his likelihood to default on payments, resulting rising foreclosure rates and higher personal insolvencies.
Reports of mortgage companies going bankrupt or subprime investing becoming worthless have been flooding the economic and financial sections of the news. Comparisons of trends in the past decade within the housing market have been made to the rise of the stock bubble in the nineties. While housing construction and housing prices are expected to rise with population and economic growth, recent growth trends, according to many experts, have been disproportionate, leading to what many believe to be a “bubble wealth” accumulating in the market. If the housing market were to be thrown into turmoil, the effects would be more devastating and everlasting than a stock market crash, since housing is more prevalent in the economy.
Subprime Lending
Subprime lenders do business with people turned away by prime rate lenders for having bad credit history or little to no collateral, thereby representing a higher risk of defaulting on the debt for the lending institution. In 2001, record-low interest rates set by the Federal Reserve and escalating housing prices spurred on an entire market of subprime lenders, who translated such low interest rates into loans with few restrictions and artificially low interest rates to subprime clients. In return for these benefits, borrowers face massive increases in uncapped interest rates several years down the road. Consider that fact with another relevant statistic provided by Dr. David Martin, “somewhere between the 17th month and the 24th month…everything that looked like a good credit starts to look like a bad credit.” Dr. Martin provides another estimate, “Christmas of 2005, January of 2006 is…when we over extended our credit…17 to 24 months would put us in January 2008.” Glenn Costello, an analyst at Fitch Ratings in New York, offers similar estimates, “Delinquencies tend to peak two to three years after subprime loans are originated.” Today, with mortgage default rates highest in recent home-lending history, there is substantial evidence for such ominous predictions.
Some results of “too-easy credit”: Southstar Funding LLC filed for voluntary bankruptcy protection on April 11, 2007; on April 2nd, 2007, New Century Financial Corporation, previously the second largest subprime mortgaging financial institution, filed for bankruptcy; foreclosure filings were up 65% from 2006-7. The future of the housing market was as suggested by Dr. Martin, “all of a sudden, the fecal matter hits the rotary oscillator and it’s bad.”
Adaped from: http://www.arlingtoninstitute.org/wbp/economic-collapse/450#