Credit crunch, financial crash, recession, Wall Street crash – whatever you choose to call it – the economic crisis that began in 2008 set in motion a troubling chain of events.
The banking crisis has hit people in the US hard. We’ve been losing jobs and public services that are vital to sustain our local economies and communities. Poor people are struggling – but they’re toughing it out, fighting to drag themselves out of poverty. But the crisis is not over yet and the impact of this downturn will hit them harder and longer.
The effects of the global economic crisis have been felt around the world and we’re all tightening our belts. And the poor countries, who did nothing to cause the crisis, are feeling the effects, it left a devastating $65 billion gap in their budgets.
The politicians have shifted the debate from how we deal with the economic crisis – to reducing the debt by public spending and services. We need to speak up - cuts are not the only way. And while the blame for the economic crisis lies largely at the door of the banks they must be part of the solution. Yet while ordinary Americans struggle, the banks that got us into this mess have returned to record profits and bonuses.
For those who have lost their jobs in the recession we need to ensure the safety nets are designed to help in the best way possible. It is vital that people are always better off in work. We urgently need to invest in the system so it stops trapping people and offers support instead. We need to invest in creating new jobs, especially jobs that maintain our human infrastructure and build our crumbling infrastructure. Investment and support for local business could help to ease the pinch we’ve all been feeling.
So what can we do about all this? Well, a clear commitment from Government to tackle the deficit, end domestic poverty, invest in jobs and protect public services would be a good start. But that, of course, will cost money.
The Robin Hood Tax could raise billions every year to help those hit hardest by the economic crisis, at home and abroad.
Every American can tell you a story about how the financial crisis has affected them or their friends. It was the largest crisis of a generation and the Federal Government pumped in trillions of taxpayers money to save financial institutions such as AIG, others such as Lehman Brothers went under. This led to a huge national debt and sparked a recession - the impact of which continues to be felt to this day with people across the country suffering job losses, cuts to services and foreclosures.
But it's not just here that people have had to tighten their belts. Around the world the equivalent of half the population of the United States have been forced to live on less than $2 dollars a day as a result of the financial crisis they did nothing to cause.
Although banks had gotten us into trouble, thanks to the taxpayer bailout they were largely protected from feeling its effects – Wall Street profits and bonuses quickly returned to business as usual. That's why it's time for a Robin Hood Tax - where those most responsible pay their fair share to help get America, and the rest of the world, back on its feet.
The role of the banks in causing the economic crisis has been well documented - the credit crisis of 2008 was so severe that ATMs were within hours of being turned off. This prompted the government to spend $2.5 trillion (that's $2,500,000,000,000) to save the banks and financial institutions. The government committed to spend even more - $12.2 trillion to keep things going, that's equivalent to almost the entire GDP of the United States.
It kept the financial system afloat, but left us saddled with large debts that must be paid down through cuts in services and tax rises. This has a huge impact on people's lives. By 2010 the National Center on Family Homelessness estimated that 1.6 million children were living on the streets, in shelters, motels or doubled-up with other families. That's a marked jump of 38 percent from pre-crisis levels in 2007.
The financial crisis also sparked the longest post-World War II recession in the states. It was also the deepest in terms of job losses - 84,000 additional jobs a month disappeared from the US in 2010 alone.
The world's poorest have been dealt a double-whammy the financial crisis: the poorest nations found they had a $65 billion hole in their budgets thanks to a financial crisis caused on the trading floors of banks in the richest countries. It meant schools and hospitals lost out on funding, roads went unbuilt and people went hungry.
This has been compounded by a sharp drop in the level of aid from rich countries – now at it's lowest for a generation, and the reneging on a $100 billion climate change adaptation fund. Quite simply this means millions more have, and will be continue to be, been pushed into poverty unless we act and introduce a Robin Hood Tax.
What Robin Can Do
Simply put, the Robin Hood Tax could generate hundreds of billions of dollars. This tax on the financial sector has the power to raise hundreds of billions every year to provide funding for jobs to kickstart the economy and get America back on its feet. It could help save the social safety net in the US and around the world.
This tiny tax of less than half a percent on financial sector transactions can generate $350 billion annually in the USA alone. That's enough to protect schools and hospitals. Enough to stop massive austerity measures hitting the community services. Enough to pay for life saving medicines and to deal with the new climate challenges our world is facing.
The Robin Hood Tax could raise hundreds of billions to ensure every American can live the quality of life they deserve.