The US mortgage crisis has seriously challenged the idea of laissez faire (free market) economies. What was once regarded as the soundest and progressive economic model is now suffering a crisis of confidence. No one seems to have the answers.
The free market economic model in a nutshell dictates that a government must not interfere or be involved in any economic activity. On the other extreme end you have communist economies where government owns, controls and directs all economic activity. What is important to note is that no country is fully capitalist or communist. Most countries are mixed economies defined as capitalist or communist depending on how far they lean either way.
In the early 1990's the World Bank and International Monetary Fund (IMF) came up with a series of programs known as Structural Adjustment Programs (SAP's) designed to help third world economies spur economic growth and get out of … Read More