Reply #2: The problem is too much production from low-wage countries,

[JDPriestly]

pay that is too low in developed countries and therefore not enough demand to keep things going.

Trade barriers have been lowered too fast. That is the problem. The recession will probably spread across the world, and as it spreads countries will, in subtle ways such as VAT taxes, impose tariffs that encourage local industry, local employment and return some balance to international trade.

Right now, poor countries with low wage structures and no middle, consuming classes are producing a surplus of goods that the increasingly unemployed and impoverished formerly middle-class people in what used to be the high-wage countries can no longer afford.

Prices of manufactured goods other than pharmaceuticals and a few other things are declining but people still don't can't afford to buy them.

The rich have money and don't understand the extent to which the not-so-rich are struggling.

This "expert" is a perfect example of a person who doesn't fathom what is going on. He blames governments spending beyond revenues. But that is not the problem. The problem is that revenues in developed countries have declined compared to the needs of the increasingly impoverished people.

The more governments cut back on expenditures, the worse the situation will become.