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Causes of the 2008 recession
Causes of the 2008 recession
Americas economy 1900-1930
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There is perhaps no other political issue in our contemporary society that is more pertinent, pervasive, and encompassing than a nation’s economy. From the first coins used in Greece and the Asia Minor in the 7th century BCE, to the earliest uses of paper money, history has proven time and time again that the control of a region’s economy is absolutely crucial to maintaining social stability and prosperity. Yet, for over a century scholars have continued to speculate why the United States, one of the world’s strongest and most influential countries, has one of the most unstable economies. Although the causes of this economic instability can be attributed to multiple factors, nearly all economists agree that they have a common ancestor: the Federal Reserve Bank – the official central bank of the United States. Throughout the course of this paper, I will attempt to determine whether or not there is a causal relationship between the Federal Reserve Bank’s monetary policies and the decline of the U.S. economy. I will do this through a brief analysis of the history and role of this institution, in addition to the central banking system in general. In turn, I will argue that the reckless and intentional manipulation of the economy by the Federal Reserve Bank, through inflation and the abolishment of the gold standard, has led to the current economic crisis in the United States. Before we begin our investigation, it is imperative that we understand the historical role of the central bank in the United States. Examining the traditional motives of this institution over time will help the reader observe a direct correlation between it and its ability to manipulate an economy. To start, I will examine one of its central policies... ... middle of paper ... ...iew 26.4: 683-690. JSTOR Database. Web. 18 Nov. 2010. Sprague, O.M.W. “The Federal Reserve Act of 1913.” The MIT Press 28.2 (1914): 213-254. JSTOR Database. Web. 18 Nov. 2010. Sproul, Allan. "The Gold Question." Vital Speeches of the Day 16.4 (1949): 108. Academic Search Complete. EBSCO. Web. 18 Nov. 2010. United States. Federal Reserve Bank. Frequently Asked Questions. Mar. 2007. The Federal Reserve Board. Web. 13 Dec. 2010. United States. U.S. Department of the Treasury. Historical Debt Outstanding – Annual 1791 – 1849. Aug. 2008. Treasury Direct. Web. 13 Dec. 2010. United States Constitution. Amendment 10. USdebtclock.org. U.S. National Debt Clock, 2010. Web. 13 Dec. 2010.
Office of Management and Budget. (2011). Budget of the United States Government: Fiscal Year 2012. Retrieved from http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/veterans.pdf
As the new century approached, a national crisis began to develop in the United States. The nation faced a severe depression, nationwide labor unrest and violence, and the government’s inability to fix any of the occurring problems. The Panic of 1893 ravaged the nation and became the worse economic crisis of its time. The depression’s ruthlessness contributed to social unrest and weakened the monetary system’s strength, leading to a debate over what would be the foundation of the national currency. As the era ended, the US sought to increase its power and strength.
...an Buren declared that he would retain Jackson’s Specie Circular. Within a week, on May 10th, the Panic of 1837 erupted in New York with banks refusing to redeem in specie. It turned out that none of the banks had hard cash available. Van Buren and his successor President William Henry Harrison were unable to solve the depression. On June 8th, 1840 a bill was passed in the Senate providing for the repeal of the Independent Treasury Act. The bill passed the House and it was signed by the newly elected Whig President Tyler. Although victorious Whigs repealed the Independent Treasury in 1841, they were unable to replace it with a national bank. Revived in 1846 by a new Democratic administration, the Independent Treasury remained in operation until the Federal Reserve System was created in 1913.
For the past century, the United States has been regarded as the greatest hegemonic power in the world. The U.S. played the most important role in the advancement of mankind from social, political, scientific, military, and economic standpoint. Unfortunately, today this is no longer true. Since the 1980’s the U.S. has been on a gradual decline. The introduction and implementation of trickle down economics, otherwise known as “Reaganomics,” has contributed greatly to the systemic dismantling of the socioeconomic structure that made America great.
United States Department Of Veterans Affairs (2012, February 9). The GI BILL's History. Retrieved February 12, 2012, from http://www.gibill.va.gov/benefits/history_timeline/index.html
Sosin, Jack M. "Imperial Regulation of Colonial Paper Money, 1764–1773". Pennsylvania Magazine of History and Biography, Volume 88, Number 2 (April 1964), 174–98.
“The National Debt (sidebar).” Issues and Controversies. Facts on File News Services, 23 Jan. 2009. Web. 25 May 2011. .
Friedman, Milton and Jacobson Schwartz, Anna. A Monetary History of the United States, 1867-1960. Princeton, 1963
United States. U.S. Department of the Treasury. Historical Debt Outstanding – Annual: 2000-2012, 1950-1999, 1900-1949. Treasury Direct, 2012. Web. 4 May 2014. .
U.S Federal Deficit and Debts:Understanding the history and context. (2011, November 1). Utah Foundation. Retrieved January 25, 2014, from http://www.utahfoundation.org/img/pdfs/rr7
“In the years which followed the gold discoveries, society was not stratified. Moral and religious principles were often disregarded, and all kinds of irregular situations could be found.”3
2) Davis, Gareth. The Destruction of the Second Bank of the United States Rationale and
The first major aspect of the monetary policy by the Federal Reserve is its interest rate policy. This interest rate policy is mainly determined by the figure for the federal funds rate, which is the rate at which commercial banks with balances held within the Federal Reserve can borrow from each other overnight in ord...
Author Unknown (1994). The Federal Reserve System: Purposes and Functions (5th ed.) Published by Library of Congress
“First Bank of the United States – Conservapedia” Conservapedia. Retrieved November 26, 2013 from: http://conservapedia.com/First_Bank_of_the_United_States.