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406 • International TradeCurrently, an economic crisis is defined as any threat to economicgrowth; a recession is explicitly defined as two consecutive quarters withoutgrowth in GNP. Implicit in this definition is the paradigm of the economicsystem as the whole and the ecosystem as the part, and the goal ofendless growth. If we accept the ecological economic paradigm, in whichthe economy is sustained and contained by the global ecosystem, thencontinuous growth is of course impossible. An appropriate goal is to enhancequality of life. In the ecological economic paradigm, we thereforeredefine a crisis as economic conditions that generate (or will inevitablygenerate) unemployment, poverty, misery, or instability. In other words,we define crisis as an economic threat to our quality of life.How we define a crisis determines what we should do to address it. Itfollows from this new definition that we should not spend trillions bailingout the financial sector but rather spend to create jobs and end povertyand misery for the current generation, while addressing the critical problemssuch as climate change that threaten the flow of ecosystem servicesnecessary to the well-being of future generations. Among the policies implicitin these goals are public investments in education, the developmentand deployment of green energy technologies, maintenance of critical publicinfrastructure, and restoration of depleted natural capital.Recent policies to forestall crisis, developed within the conventionalparadigm, have been to cut taxes and run massive deficits to stimulategrowth, which impose the burden of repayment (financial and ecological)on future generations. The ecological economics framework suggests imposinghigher but much more progressive taxes. A tax on financial transactionswould reduce short term speculative investors and the risks theygenerate. Higher taxes would unquestionably deter resumed growth in theeconomy but, when used to fund the policies we suggest above, wouldavoid collapse. The difference between economic collapse caused by financialcrisis and a carefully planned reduction in growth is analogous tothe difference between a plane crash and a hovering helicopter, both ofwhich are stationary.If new taxes prove inadequate to fund government expenditures neededto achieve the goals suggested above, the government can recapture theright to seigniorage and simply spend money into existence. In the midst offinancial crises, banks act in a pro-cyclical manner, refusing to lend newmoney. The ideal time to raise reserve requirements is when banks are voluntarilykeeping larger reserves than required. In response to the sub-primemortgage crisis, national governments are printing up and selling treasury24 D. Meadows, Leverage Points: Places to Intervene in a System, Hartland, VT: The SustainabilityInstitute, 1999.