Funding Accommodation for NHS Service Users

Funding Accommodation for NHS Service Users The implications of providing and/or funding accommodation for service users under the NHS and Community Care Act 1990 and Mental Health Act 1983: Community care is wrought with conflicting duties, in the first instance carers in the community must preserve life and dignity but also fulfill the wishes of the client.[1] In respect to health and care management in the mentally ill there is various legal, moral and social implications for carers and the local authorities. The main question is whether the client should be moved from hospital to community care, because of their inability to care for themselves and the lack of services and accommodation.[2] In addition the reduction of costs on the state to have a fleet of 24/7 on calls aftercare services and the cost of providing individual housing[3]. Detention within a hospital unit is the biggest breach of human integrity, because the freedom of the individual has been taken away. In addition this may be the only avenue when the mentally infirm client refuses to take their medications and are unable to care for themselves and need 24/7 care, especially when there are no family me mbers able to care for them therefore leaving them as the responsibility of the state. It is a difficult position that carers are in, but extra resources and education sufficient care in the community is possible.[4] The following discussion is going to explore the duty that the local authorities hold to provide sufficient aftercare service, carers and housing to vulnerable persons once they have left the hospital scene. It will focus on the mentally ill, because there is a higher likelihood that housing and aftercare is needed for service users under section 117 of the Mental Health Act 1983 (MHA). Prior to this a discussion of detention and sectioning under the MHA will be discussed to illustrate that their human rights may easily be breached in the Local Authorities to provide sufficient aftercare, so that the individual may be further detained in the hospital facility. Under section 2 of the MHA an individual can be sectioned, which is detained for medical treatment on the grounds of mental illness, by an approved social worker or close family relative who is over 18. This means that the individual’s human right to liberty may be breached, therefore the law has to be certain that this right can be derogated in the circumstances. Under the 1983 Act the law requires that person sectioning the individual must have seen him in the last 14 days and this allows the individual to be detained for up to 28 days and the following admission procedure is adhered to: Two doctors must confirm that: (a) the patient is suffering from a mental disorder of a nature or degree that warrants detention in hospital for assessment (or assessment followed by medical treatment) for at least a limited period; and (b) she or he ought to be detained in the interests of her or his own health or safety, or with a view to the protection of others.[5] As a fail safe to incorrect detentions under section 2 of the MHA the individual can be released by the following individuals; RMO; hospital managers; the nearest relative, who must give 72 hours notice. The RMO can prevent her or him discharging a patient by making a report to the hospital managers. [Finally the] MHRT. [In addition] The patient can apply to a tribunal within the first 14 days of detention. [6] Therefore the law allows for the individual to be detained, but only if the person is honestly a threat to themselves and society, with mental illness it is highly that the person will be treated efficiently, but will need sufficient aftercare as mental health issues are usually long term. Under section 3 of the MHA it sets out the situation that the individual can be detained for; otherwise the individual should be given their liberty and given sufficient outpatient or aftercare service. Section 3(2) sets up three grounds that the individual can be detained for hospital treatment, which are: (a) he is suffering from mental illness, severe mental impairment, psychopathic disorder or mental impairment and his mental disorder is of a nature or degree which makes it appropriate for him to receive medical treatment in a hospital; and (b) in the case of psychopathic disorder or mental impairment, such treatment is likely to alleviate or prevent a deterioration of his condition; and (c) it is necessary for the health or safety of the patient or for the protection of other persons that he should receive such treatment and it cannot be provided unless he is detained under this section. All three grounds must be satisfied to detain the individual in hospital, otherwise there will be a breach of the individual’s right to liberty under the Human Rights Act 1998 (HRA). If hospital treatment is not warranted an application for guardianship for over 16’s can be made either by the Local Authority or the person seeking guardianship; again as this threatens the integrity and the right to make one’s own decisions that section 7(2) of the MHA states that the following two grounds must be complied with: (a) he is suffering from mental disorder, being mental illness, severe mental impairment, psychopathic disorder or mental impairment and his mental disorder is of a nature or degree which warrants his reception into guardianship under this section; and (b) it is necessary in the interests of the welfare of the patient or for the protection of, other persons that the patient should be so received. Therefore because the integrity of the individual is at threat and guardianship can include admission into hospital that the individual must be deemed as incapable for caring for themselves. The strict grounds stops the use of detention as a cheap option for Local Authorities over sufficient aftercare services; however an individual can get themselves admitted if they feel the need to be hospitalized for mental illness under section 131 of the MHA. In addition this act allows the individual to stop being discharged from the hospital, because the individual feels safe in the environment. As this is voluntary and the patient can decide to leave at any time this is not a breach of Article 5 of the European Convention on Human Rights (ECHR) as enacted through the HRA. Prior to moving on the provisions of Article 5 will be discussed as this is important to ensuring that the patient is discharged from forced detainment at the soonest possible moment and sufficient aftercare provided; other wise detainment could seen by the NHS and Local Authorities as a cost cutting measure to providing housing and aftercare services. Under Article 5(1)(e) it allows the detention of persons of unsound mind on the basis of lawful detention and procedure is prescribed under domestic law. The definition of unsound mind was left to an evolving definition in Winterwerp v Netherlands[7]; however detention can not be made merely on the basis that the individual’s belief system and behaviour are deviate from the norm. The use of detention under 5(1)(e) can only be for self-protection or the protection of the public, whereby the detention should only occur when; a medical disorder by an objective medical personnel; the nature and degree of the disorder is significantly extreme; and the detention is only as long as the medical disorder. In Ashingdane v UK[8] it was added that detention can only occur in a hospital or appropriate medical institution. The only circumstances that these requirements are weakened are with respect to emergency admissions but the detention should be properly assessed and continued detention should cease if the person is not of unsound mind[9]. Detention is an important part of mental health treatment and it is in these cases that treatment against one’s wishes will occur. The state is required to provide an adequate level of medical treatment, including psychiatric care.[10] However, the patient should be released from detainment as soon as these grounds are no longer met as per section 16 of the MHA and sufficient aftercare service provided. This is an area of great concern when providing care in the area of the mentally infirm has always posed a difficult area for carers, doctors, nurses and human rights and consent is the key problem, because where does the law draw the line for treatment and incarceration into supervised care against or without the patient’s will? In most normal circumstances no treatment can be performed without the patient’s consent; however how does this work if the patient has been determined mentally incapable of making r ational decisions and therefore unable or unwilling to give consent. If a doctor has ordered that treatment should be made the question arises whether the nurse should still proceed, as it is in the best welfare of the patient or withhold treatment because the patient is unable or unwilling to give consent? Prior to the enactment of the HRA the problem of consent was a lot less murky as rights were given on the basis that there was no law restricting them, i.e. civil liberties. Therefore if parliament deemed that that rights such as consent for medical treatment should be restricted because of one’s mental health this was justification enough, as parliament is supreme. The HRA changed this because a set of inherent rights were introduced which conflicted in cases with the will and supremacy of parliament, of which the right to a private life and the liberty and security of the person came to the forefront of the debate of consent and mental health, i.e. the person has the con trol to determine what happens to their body and freedom and this is not determined by the wishes, albeit good of parliament and using detainment as a cost effective measure and not providing a sufficient aftercare service is a breach of Article 5. In addition it breaches the statutory duty owed by the Local Authorities and the NHS under section 117 of the MHA and section 42 of the NHS and Community Care Act 1990 (NHSCCA). The following discussion is going to explore the duty to provide aftercare and consider whether it is being met, especially in the light of R v Ealing District Health Authority, ex parte Fox[11] where it was held under section 117 of the MHA: (1) that the authority has erred in law in not attempting with all reasonable expedition and diligence to make arrangements so as to enable the applicant to comply with the conditions imposed by the mental health review tribunal; (2) that a district health authority is under a duty under section 117 of the Mental Health Act 1983 to provide aftercare services when patient leaves hospital, and acts unlawfully in failing to seek to make practical arrangements for after-care prior to that patients discharge from hospital where such arrangements are required by mental health review tribunal in order to enable the patient to be conditionally discharged from hospital. Therefore the following discussion will explore these duties to provide sufficient aftercare services. In the case of the NHSCCA the case law and provisions are an amalgamation of a series of previous community care provisions, therefore these will be discussed and indicated to their standing within this act. Community care law and the provision of accommodation and after care services were provided as a statutory duty National Assistance Act 1948 (NAA). The NAA abolished the Poor Laws and imposed a duty on Local Authorities under section 21 to provide housing on those who by reason, illness, disability or any other circumstances are in need of care and attention which was not otherwise available to them. The NHSCCA amends section 21 to include nursing mother but upholds this duty to provide accommodation to the ill. This accommodation must be given to the individual free of charge or the Local Authority must pay for it, as they are unable to work under section 44-45 of the NHSCCA and section 117 of the MHA. As the cases of R v Manchester CC ex parte Stennet[12]; R v Redcar and Cleveland BC ex parte Armstrong[13]; and R v Harrow LBC ex parte Cobham[14] revealed that individuals that had been detained under section 3 and no longer fulfill these grounds must be provided sufficient aftercare services under section 117 of the MHA, sections 42-50 of the NHSCCA and the Health Act 1999 (HlthA) section 5 this soon not be provided at a cost to the individual. Under the NAA section 22 this charging regime did exist however this was repealed in the NHSCCA. In addition the Local Authority and Primary Care Trust it is also under a duty to provide services that are essential to the aftercare of the individual. Under section 29 of the NAA it was limited to only promoting other welfare arrangements, which included information, instruction and recreation in and outside their homes. The wording to promote welfare services was the downfall of the NAA because there was no obligation for the LA to provide these services, i.e. the LA has a discretion rather than a duty to provide such services.[15] However the Chronically Sick and Disabled Persons Act 1970 (CSDPA) where the Local Authority were obliged to provide services, including education and recreation; as well as sufficient adaptations to the home, access to holidays and meal provisions under section 2 of the CSPDA. This was confirmed in the case of R v Gloucestershire CC ex parte Barry[16]. Section 2 of the CSPDA has been called the finest community care statute[17] the disabled or chronic ally ill person under the act has a right to these resources regardless of whether the Local Authority has the availability of them, they must be provided upon request. This supports and strengthens the section 21 of the NAA, now section 42 of the NHSCCA[18] and section 2 of the CSPDA. However, the NHSCCA sections 46-50 and section 117 of the MHA have enforced the obligation to provide aftercare services after being released from hospital without charge[19]. This was confirmed in the case of Clunis v Camden and Islington HA[20]. In addition the Local Authority must provide payments or grants to ensure that the individual can live comfortably once released from the hospital, this is more applicable to physically disabled individuals and is confirmed under section 46-50 of the NHSCCA, for example section 47 determines the extent of aftercare services that the individual requires: (1)Â  Subject to subsections (5) and (6) below, where it appears to a local authority that any person for whom they may provide or arrange for the provision of community care services may be in need of any such services, the authority— (a)Â  shall carry out an assessment of his needs for those services; and (b)Â  having regard to the results of that assessment, shall then decide whether his needs call for the provision by them of any such services. These services and the extent that they are provided are contained in a variety of acts, for example if the person requires adaptations to their home the Local Authority is under a duty to provide a grant if the individual cannot afford it. This right is protected under section 23 and 24 of the Housing Grants, Construction Regeneration Act 1996 (HGCRA). Section 23 and 24 imposes an obligation in the LA to make grants to make the necessary adaptations to their home, which is confirmed in the case of R v Birmingham CC ex parte Taj Mohammed[21]. If the individual needs to be housed in a special nursing home then the Local Authority is either entitled to provide the service or pay the registered nursing home for their services. This is protected under section 46 of the NHSCCA. This service should be provided efficiently and immediately and as with the Fox Case this should not be prolonged detention within a hospital. Section 50 of the NHSCCA provides the duty and guidelines for these pr ovisions and failure to do so will result in the investigation of the Local Authority. Section 50 of the NHSCCA has tried to deal with the problems with the current care framework, which is that although healthcare is free community care and carers provisions cost the individual who needs the aid. The individual has a right for community care to be provided, but in a lot of circumstances the receipt of funds to pay or the provision of the service can be delayed due to the Local Authorities and Primary Care Trusts fighting over who should foot the bill. This controversy has been risen in R (T) v Hackney[22] but has not been sufficiently resolved; rather the most appropriate authority must provide the care. Therefore section 50 (7)(e) states that: The Secretary of State may, with the approval of the Treasury, make grants out of money provided by Parliament towards any expenses of local authorities incurred in connection with the exercise of their social services functions in relation to persons suffering from mental illness. The problem with this is that it does not provide grants for the physically disabled, which means for these individual’s aftercare services will continue to be delayed to arguments over who will be paying the bill for the cost. In respect to housing this is the duty of the Local Authority and either housing should be directly provided or payment to a housing association or private landlord should be made. The other avenue that the Local Authority has is that the individual can receive direct payments for aftercare under the Community Care (Direct Payments) Act 1998 (CCDPA) renamed the Health and Social Care Act 2001 (HSCA). The individual with this money can pay their housing and choose an pay an appropriate carer and aftercare services. To be eligible the carer and aftercare service must be sufficiently educated to deal with the individual’s needs. In limited and exceptional circumstances a family member can be paid carers allowance, but it must be sufficiently illustr ated that this individual can meet the individual’s needs as per the Direct Payments Regulations 2003 Regulation 6. If the individual is unable to deal with their own care payments then the Local Authority must provide an agency that can deal with the aid of community care payments to be made to the carer. Under English law these agencies are called Independent User Trusts that provide the payments services for either the Local Authority or the Primary Care Trust, as supported by the cases of A v B v East Sussex.[23] This system means that the aftercare services and payments are NOT being directly paid therefore this leaves the possibility that the individual will use the money for other purposes and therefore the aftercare has to be provided at extra cost to the Local Authority, because there is a duty to provide under section 117 of the MHA sections 42-50 of the NHSCCA and section 5 of the HlthA. On the whole Local Authorities do not promote the use of Direct Payments becau se of the limitations of not aiding mental health service users and the extra expense of the Independent User Trusts. The Local Authority is under no duty to provide Direct Payments or information about then, just the services and care that are a duty; therefore the Local Authority is more likely to provide direct care services rather than payment. This is why in respect to housing the Local Authority is more likely to provide housing in housing trusts and make the payments directly to these entities, as council owned properties are less available. The duty to provide accommodation is also cemented in the Housing Act 1996 (HA), which has obligated special duties for Local Authority to provide housing in the rental sector for vulnerable adults, which includes those that come under section 117 of the MHA and sections 42-45 of the NHSCCA. There are still problems with effective community care, because as the Fox Case and the Stennet, Armstrong and Cobham Cases illustrated is that Local Authorities and Primary Care Trusts do not want to foot the bill for aftercare services. In the Fox Case continued hospitalization was argued for because it was cost effective, but as section 117 of the MHA states that if the individual is no longer detainable under section 3 and does not voluntarily remain under section 131 then release must occur. This duty to release and provision of sufficient community care is argued the best method for the mentally infirm and disabled.[24] Gitlin Cocoran[25] argue that the main health concerns are that of safety when dealing with dementia (as with other mental illnesses and the physically disabled) living at home alone or with family members and all that is needed are specific modifications to the physical environment to address these issues, and guiding principles for implementing environmental changes. This is provided under the NHSCCA, MHA and grants are available under the HGCRA, therefore there is no excuse that the individual cannot receive community care when hospitalization is not necessary. This has extra costs to the state, as the Fox Case illsustrates, in re-education and in cases of non-affordability of the adaptations; however it is usually easier and more cost-efficient to hospitalize the client but it is necessary so a breach of the client’s human rights. Finally, studies such as Richards et al[26] and Schneider et al[27] argue that care of dementia is a much higher standard when within the community, because it reduces depression and gives a higher quality of life. As Barnett argues the individual should have a say in the caring strategy and forced hospitalization should only occur if section 3 of the MHA is fulfilled.[28] The law under the MHA, HlthA, NHSCCA and the HGCRA has made it a duty to the Local Authority that community resources should be ma de available therefore making hospitalization unreasonable and a breach of human rights[29]; however as the Fox Case has illustrated the Local Authorities will still attempt to dismiss this duty under the guise of necessary detention under the MHA or as with the Stennet, Armstrong and Cobham Cases charge the individual for their provision.[30] However, as these cases have enforced there is no charge and their provision is a duty at no charge and better cohesion between Primary Care Trusts and Local Authorities needs to occur to stop the passing of the bill from one agency to another, whilst the individual is either unfairly detained or without these essential services: Joint policies between PCTs/health authorities and social services are to be agreed to ensure the duty is met (HSC 2000/003). Where funding issues arise, and the health agencies are considering their obligation only to fund health costs under S.3 of the NHS Act 1977, regard may be had to the pooling arrangements for health and social care budgets under the Health Act 1999.[31] Bibliography: Alzheimers Disease Society, 1992, Safe as Houses Living alone with Dementia (A resource booklet to aid risk management) Alzheimer’s Disease Society London The Alzheimers Association, 2000, Guidelines for Dignity: Goals of Specialized Alzheimer/Dementia Care in Residential Settings, Alzheimer’s Association Chicago Antonangeli, 1995, Of Two Minds: A Guide to the Care of People with the Dual Diagnosis of Alzheimers Disease and Mental Retardation, Malden Barnett, 2000, Including the person with dementia in designing and delivering care: I need to be me! Jessica Kingsley Publishers Bowen, 2006, Human Rights Transforming Services, Social Care Institute for Excellence Brayne Carr, 2005, Law for Social Workers Oxford University Clements, 2004, Community Care and the Law London Legal Action Group (LAG) Cox, 1998, Home Solutions: Housing Support for People with Dementia, The Housing Associations Charitable Trust Day et al. 2000, The Therapeutic Design of Environments for People with Dementia: A Review of the Empirical Research, The Gerontologist 2000 (40) Day, 2002, The management of acute and chronic pain the community. Professional Nurse papers. 17(6) , Feb. 02. Department of Health, 2001, NHS Identity Guideline The Stationery Office Department of Health, 2004 Research Governance Framework Implementation Plan for Social Care DH ref 3402 Gitlin Cocoran, 2000, Making Homes Safer: Environmental Adaptations for People with Dementia Alzheimers Care Quarterly 1(1) Hoggett, 2002, The Family, Law and Society, LexisNexis UK Grubb, 2004, Principles of Medical Law 2nd Edition, Oxford University Press Hewitt, 2004, Between Necessity and Chance, NLJ 154(7124) Mahendra, 1998, Unto the Breach, The Practioner, in the NLJ 148(6857) Mind, Outline of the Mental Health Act 1983 http://www.mind.org.uk/Information/Legal/OGMHA.htm#s2 Mandelstan,1997, Equipment for Older or Disabled People and the Law Jessica Kingsley Mandelstan, 2005, Community Care Practice and the Law Jessica Kingsley McDonald, 1999, Understanding Community Care: A Guide for Social Workers Macmillan Meredith, 1995, The Community Care Handbook: The Reformed System Explained Age Concern NHS, Section 12(2) of MHA 1983 Website, can be found at: http://www.guideweb.org.uk/section12/section121.html Parsons, 2003, United Kingdom: Charging for Aftercare Services under s117 Mental Health Act 1983 – The Final Story, RadcliffesLeBrasseur can be found at: http://www.mondaq.com/article.asp?articleid=22439print=1 Percy Commission, 1957 Report of the Royal Commission on the Law Relating to Mental Illness and Mental Deficiency Cmnd 169 1954-1957 Richards et al, 2000, Cognitive function in UK community dwelling African Caribbean and white elders: a pilot study International Journal of Geriatric Psychiatry 15 (7) Sandland Bartlett, 2003, Mental Health Law: Policy and Practice, Oxford Schneider et al,1997, Residential care for elderly people: an exploratory study of quality measurement Mental Health Research Review 4 WHO, 2003, Mental Health Legislation and Human Rights, WHO Footnotes [1] Keady, 2003 [2] Alzheimer’s Association Chicago, 2000 [3] Alzheimer’s Disease Association London, 1992 [4] Antonangeli, 1995 [5] Mind, Outline of the Mental Health Act 1983 http://www.mind.org.uk/Information/Legal/OGMHA.htm#s2 [6] Mind, Outline of the Mental Health Act 1983 http://www.mind.org.uk/Information/Legal/OGMHA.htm#s2 [7] (1979-80) 2 EHRR 387 [8] (1985) 7 EHRR 528 [9] Article 5(4) and Megyeri v Germany (1993) 15 EHRR 584 [10] The Greek Case [1969] 12 Yearbook 1 ; Cyprus v Turkey (1982) 4 EHRR 482; Keenan v UK [2001] The Times April 18th 2001 [11] [1993] 1 WLR 373 [12] [2002] 2 AC 1127 [13] [2002] 2 AC 1127 [14] [2002] 2 AC 1127 [15] Bowen, 2006 [16] [1997] AC 584 [17] Clements, 2005 [18] R v Kensington Chelsea RLBC ex parte Kujtim [1999] 2 CCLR 340 [19] R v Manchester CC ex parte Stennett [2002] unreported [20] [1998] 3 AER 180 [21] [1999] 1 WLR 33 [22] [2006] 9 CCLR 58 [23] [2003] CCLR 177 [24] Day et al, 2000 [25] Gitlin Cocoran, 2000, pgs. 50-58 [26] Richards et al, 2000 [27] Schneider et al, 1997 [28] Barnett, 2000 [29] Cox, 1998 [30] Parsons, 2003 [31] Parsons, 2003

Violent Video Games Are Harmful to Young People

Violent video games can definitely be harmful to young people, especially very young, easily influenced children. Maybe they don’t affect each child the same, but I’m sure that there are times when they negatively affect the life of an adolescent. I would imagine that any one exposed to violence like some I’ve seen on some video games, would pick up the behavior subconsciously over time, even if they don’t consciously act violent. Sometimes young people who play games like these sort of separate themselves from reality, which leads to angry behavior.Other times, it leads straight to violence because that’s what these kids know and experience daily on the television screen. Everyone has heard the controversy surrounding the hugely popular Grand Theft Auto games. In which, young people steal cars and kill people for absolutely no reason. I see this as a perfect example. I wonder how often kids spend time playing this game, or others similar to it, and suddenly start acting out violently as a result. I believe that young people don’t always necessarily have the maturity to realize that video games aren’t real.It’s at these young ages that our lives are shaped, and we learn by example to become well rounded adults. If kids are constantly observing violence, then as they age they are sure to act violently or at least harbor a great deal of anger into adulthood. While I haven’t seen this happen first hand, I’m sure that this type of thing happens all the time with young people who play violent video games all the time. Doubt: I seriously have to wonder if violent video games are harmful to young people.It seems like blaming video games is the most pleasant way for parents to avoid taking the responsibility for raising a violent kid. It’s just like how so often people blame kids’ bad behavior on music or television shows. I’ve watched violent movies, heard violent music, even pl ayed violent video games, but I don’t run around killing people or robbing liquor stores. Does that mean that the games I played weren’t violent enough to affect me? If these games are so harmful to young people, then how did I avoid these harmful side effects of them?Furthermore, if violent video games have the potential to turn sweet little children into murderers, then why does our government allow them to be sold all over our country? To me it sounds awfully familiar to the concept that rock n’ roll taught children to be wild and rambunctious. Then there’s the claim that rap music makes kids hate women and sell drugs. Young people might be easily influenced, but they aren’t stupid. It all boils down to how they were raised. I think that violent adults are most likely the result of parents who didn’t do their jobs correctly when their children were young.I mean, give young people some credit, most of them turn out all right, despite the t hings they are exposed to on a daily basis. Assuming that violent video games makes every kid violent is like believing that every young person that observes a person smoking a cigarette is going to pick up the habit. Just because kids are young that doesn’t mean that they don’t have the brain to choose how they act. I know plenty of people who love violent video games, and who are not violent people. Therefore, it’s wrong to claim that violent video games are harmful to all young people.

Consumerism Good or Bad - 1921 Words

In todays society consumerism is often portrayed to be a negative aspect of peoples lives and purchasing behaviors which inevitably leads to materialism. Many of these viewpoints can be analyzed as being subjective in that they focus primarily on frivolous products and debts created, but yet fail to acknowledge the processes of the concept of Consumerism. Consumerism is defined as, The movement seeking to protect and inform consumers by requiring such practices as honest packaging and marketing, product guarantees, and improved safety standards; and the theory that a progressively greater consumption of goods is economically beneficial. (dictionary.com). The definition of consumerism and the image depicted by a large majority†¦show more content†¦Many innovations and successes of mankind can be credited to consumerism and the information given to consumers by requiring such practices as honest packaging and marketing, product guarantees, and improved safety standards; and the theory that a progressively greater consumption of goods is economically beneficial by consumerism. Consumerism benefits the environment through several approaches. Marketing for recycling over the past decade has increased with the awareness of environmental issues being spread globally. Consumerism has also pushed marketers to use other tactics of honest advertising which are more environmentally efficient such as using the internet instead of printing magazines and newspapers. With society utilizing technological advances in computers and the internet, these methods of marketing have been proven to be just as effective as traditional methods and much more environmental friendly. Personal health and hygiene can be accredited to consumerism as well as environmental issues. Toothpaste commercials are commonly scene through television advertisements. These advertisements are honest and promote a good personal hygiene. The Got Milk? commercials aid in self well-ness and bo ne preservation globally. Worldwide the environment, personal health, and hygiene are improving with the continuous growth of consumerism. 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Causes Background Of The Current Economic Essay Example Pdf - Free Essay Example

Sample details Pages: 4 Words: 1195 Downloads: 7 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? Background United States is currently going through the rampant financial crisis and economic depression, manifested by failures in financial institutions substantially and the collapse of stock market increasing the intense market instability. With the increase in the real estate and property bubble and the flexible rate mortgages (FRM), the housing prices rose gradually. The banks began to increasingly lend out more loans to potential home owners encouraging the home owners to take on significantly high loans paying back with the interest rates. This didnt last for long as the interest rates began to rise in mid 2007 and the housing price started to drop significantly in 2006 leading into 2007. Large number of people went from tenants to homeowners due to the increase in subprime lending and homeownership rate in U.S considerably increased in large margin. This resulted to increase in house prices with unsustainable supply relative to rents which were going down (Timothy.2008). The refin ancing became more difficult in many states like California resulting to a rise of the number of foreclosed homes. Certainly many subprime borrowers had difficulty making their mortgage payments when the rise in housing prices stopped in 2006. In mid 2007, many mortgage lenders become bankrupt due the excesses of the subprime mortgage market gaining the crisis proportions. Failure to take effective action by the financial authorities and the Federal Reserve triggered surprising mayhem throughout the international financial system affecting the global financial markets (Fred, 2009). Causes of financial crisis According to Timothy (2008), the origins of the financial crisis occurred as a result of number of forces on which some were the product of market forces while others were product of market failures. Liquidity insufficiency in the U.S banking system was a main cause of the financial and economic crisis in United States which has currently led to collapse of financial insti tutions, banks, and downturn in global stock markets. The incentives created by policy and regulation both market-based and regulatory reasons also contribute to the crisis leading to a substantial financial rumble on international scale. The short term interest rates which were reduced led to the decline in inflation rates, and subsequent deflation slowing down the growth of the economy. Central banks policy rates regulations led to the deflation risks with high rate of international savings than perceived in the real investment opportunities. The investors became more confident as the rumble continued in the comparative solidity of macro, economic and financial conditions of the country with financial instruments. This aspect increased the credit risk and widely exposed the financial institutions to the risk of a less compassionate world. More weaknesses and vulnerable continues inhibit to the financial system as the interaction of these forces increase. The assumptions made by the financial institution also exposed them to major risks with the proliferation of credit risk transfer instruments driven uninterrupted liquidity. According to the Stock market investors (2011), the housing bubble in the U. S.A housing market suffered a great loss contributing to the collapse of key businesses and declines in the economic activities in many areas. The huge mortgages and unprincipled lenders led to the collapse of the highly developed real estate and property bubble making it unsustainable in the market. The increasing demand and consumption of financial assets with unsustainable supply mainly led to the collapse of the markets on which many places failed to essentially provide such financial assets. Effect to the current economic crisis The financial crisis affected the confidence in many banks and other financial institutions with the stock market experiencing systemic weakness throughout the entire financial sectors. This was accompanied by the dropping of the share prices for large, small, and investment banks losing a third of their value. The capital from consumers experienced continuous depletion due to the continuous foreclosure scourge eroding the financial power of the banks and other financial institutions experienced in many banks today. The actions taken by the banking institutions had considerable negative effects on the performance and liquidity of market as the market contributors and participants have taken measures in reduction of the reduce further loss exposure. Banks and other financial institutions are experiencing different types of liquidity and funding challenges as they have engaged in funding a wide range of different reliant liquidity and credit commitments The extensive negative effects of securitization and syndication markets has reduced the financial institutions accessibility to liquidity and their capability to control their assets and finances off the balance sheets (Fred, 2009). The liquidity of the financial conditions has further eroded as the market value of many securities declines, and investors unwillingness to finance more risky assets. This has led to cautious in strongest institutions, building up extensive platform of liquidity, reducing the leverage and bringing down the funding for the institutions leveraged counterparties. Measured and counterparty financial risks and ambiguity on the value of the market has increased with many hedges performing poorly. The coherent measures taken by the financial and other banking institutions in reduction of future losses exposure and risks have negatively affected the market functioning, increasing the liquidity implications for a large number of financial institutions and banks. The financial and banking institutions in United States such as investment banks , regulated banks and hedge funds should increasingly play an important role in ensuring the economical recovery. These institutions play a major role in provision o f credit to the country economy and have taken considerable debt and credit burdens from the investors. The Chairman of the United States Federal Reserve Board should bail out major banks and financial institutions in the country initiating economic incentive programs and enhancing important additional financial commitments in effort of enhancing the economic growth. Crisis Resolution In economic crisis resolution dynamic policy measures should be intensified and reinforced in the financial markets in an effort to downside risks. This can accelerate the growth for an economy with significant regulation in housing and other real estate transactions. This includes the monetary policy, liquidity provision. Macroeconomic and supervisory policies need to be enhanced in containing the risks. Monetary policy and liquidity instruments should be used proactively in dealing with the critical risk potential for the damage in financial markets. Provision of liquidity should be used to mit igate this risk in sequence of processes in reduction of the intensified risks at market liquidity environment. This involves the adjustment process in credit markets with substantial flexibility adjustment of these particular liquidity tools dimensions. Encouraging the financial restoration in the countries financial structures and systems implementations as expectations of the future change encourages new equity capital increase preventing the capital ratios from falling mainly on events, such as asset sales or cheap lending, that might intensify the credit crisis. Fiscal stimulus plays an important role in reduction of the downside risks to growth. This policy structure, macroeconomic stimulus, liquidity support and the targeted support for housing reduces the level of the risks bringing long term returns and growth rates parallel to the economys long term prospective. The long term regulatory reforms of the U.S. financial structure and methods should be simplified and impleme nted in balancing the capital and the market infrastructure in an effort to stabilizing economic forces in reaction to future financial market. Don’t waste time! 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