1. In order to promote economic growth, we should encourage people to spend more money.

Liberal economic theory has always attached importance to promoting production and economic development through consumption. Adam Smith said that "consumption is the only destination and purpose of all production". Schumpeter believes that the capitalist mode of production and consumption "stems from the high secularization characterized by urban hedonic life", that is, they believe that luxury consumption promotes production on the surface.

Second, the social distribution relationship is seriously unbalanced, and the income of the middle class is falling instead of rising.

In the past 30 years, a strange phenomenon has appeared in American society. On the one hand, the American people have exceeded their consumption; On the other hand, their income has been declining.

After deducting inflation, the average hourly wage in the United States is only equivalent to that of 35 years ago, while the income of men in their thirties is lower than that of men of the same age 30 years ago 12%. The fruits of economic development have flowed into the pockets of the rich. Statistics show that the income gap between the rich and the poor in the United States has been widening over the past few decades.

The American economy has developed rapidly, but its income has not increased, which is closely related to the neo-liberal policy since the Reagan administration came to power in the early 1980s.

Third, there is a serious lack of supervision in the financial industry, which induces ordinary people to spend in advance and speculate in the market through lending.

An important part of neoliberalism is deregulation, including financial supervision. Since the Reagan administration came to power in the early 1980s, the United States has been relaxing the restrictions on the financial industry and promoting financial liberalization and so-called financial innovation by enacting and amending laws.

For example, in 1982, the US Congress passed the Garn-Saint-Germain Savings Institution Act, which gave savings institutions a business scope similar to that of banks, but not regulated by the Federal Reserve. According to the law, savings institutions can buy commercial bills and corporate bonds, issue commercial mortgages and consumer loans, and even buy junk bonds.

For China's economy

First of all, the subprime mortgage crisis mainly affected China's exports.

The subprime mortgage crisis has slowed down the growth of American economy and global economy, and its impact on China's economy, especially its exports, cannot be ignored. In 2007, China's monthly export growth rate dropped from 5 1.6% in February 2007 to 2 1.7% in February 2007 due to the weak import demand in the United States and Europe.

The US subprime mortgage crisis led to a decline in China's export growth. On the one hand, it will slow down the economic growth of China to a certain extent. At the same time, due to the slow economic growth in China, the social demand for labor force is less than the supply of labor force, which will increase the employment pressure of the whole society.

Second, China will face the dual pressures of slowing economic growth and severe employment situation.

The real economy, especially industry, is under great pressure. The closure of a large number of small and medium-sized processing enterprises has also aggravated the grim situation of unemployment.

Third, the subprime mortgage crisis will increase China's exchange rate risk and capital market risk.

In response to the negative impact of the subprime mortgage crisis, the United States adopted a loose monetary policy and a weak dollar exchange rate policy. The sharp depreciation of the US dollar has brought huge exchange rate risks to China. With the economic slowdown in developed countries, China's economy continues to grow, the dollar continues to depreciate, the expectation of RMB appreciation continues, and international capital flows to China to find a safe haven, which will aggravate the risk of China's capital market.

Extended data:

Explanatory model

1, lever

Many investment banks use 20-30 times leverage in order to make huge profits. Suppose Bank A has 3 billion assets, and 30 times leverage is 90 billion.

In other words, this bank A uses 3 billion assets as collateral and borrows 90 billion for investment. If the investment gains 5%, then A will gain 4.5 billion yuan, which is 1.50% relative to A's own assets. On the other hand, if the investment loses 5%, then Bank A loses all its assets and still owes 654.38+0.5 billion.

2.CDS contract

(Credit default swap)

Due to the high risk of leverage operation, according to normal regulations, banks do not carry out such high-risk operations. So someone came up with a way to take leveraged investment as "insurance". This kind of insurance is called CDS. For example, in order to avoid leverage risk, Bank A turned to Institution B..

Institution B may be another bank or insurance company, and so on. A said to B, how about insuring the loan against default? I'll pay you 50 million insurance premium every year, 10 years, totaling 500 million. If the investment does not default, the insurance premium will be taken for nothing. If it breaks the contract, I will pay for it.

A believes that if you don't default, you can earn 4.5 billion, of which 500 million is used for insurance and you can make a net profit of 4 billion. If there is a breach of contract, there is insurance compensation anyway. So for A, it is a business that only makes money without losing money. B is a shrewd man. He did not immediately agree to A's invitation, but went back and made a statistical analysis, and found that the situation of breach of contract was less than 1%.

Do 100 business, and you can get a total of 50 billion insurance money. If one of them defaults, the compensation will not exceed 5 billion. Even if the two companies default, they can still make 40 billion. Both A and B thought the deal was good for them, so they made a decision immediately, and everyone was very happy.

Baidu encyclopedia-American subprime mortgage crisis