Fiscal and Monetary Policy Before During and After the “Great Recession” of 2008
opinion Essay
605 words
One of the most interesting facets of The Great Recession of 2008 is that it didn’t really begin in 2008. The fiscal and monetary policy that prompted what we know now as the Great Recession of 2008 really began in 2006 and 2007. What was happening then and why did it take so long for the nation to feel the recession? The answers to those questions explain a great deal about how the Federal Reserve Bank operates and how the different ideologies of economics affect our nation (Sumner, 2011). In 2006 the largest housing bubble we have seen in the past 50 years burst and in December 2007 the recession began. The recession would last for roughly 18 months, officially. However, some economists and citizens would argue that it lasted much longer than that due to the ongoing consequences the nation continued to experience all the way through 2010. Some would say we are still recovering from the recession. When the housing bubble burst the Fed responded by providing large amounts of liquidity to the economy to help soften the blow in the short term. Then the Fed lowered and lowered interest rates to encourage more investors to invest. Despite the Federal Reserve’s best efforts very large financial institutions began to experience some pretty significant trouble and the government had to step in and bail them out (Bailout Recipients, 2014). JP Morgan Chase, Citibank, Bank of America, and Lehman Bros. to name just a few were referred to as “too big to fail.” The nation barely escaped a cataclysmic financial crisis by stepping in to save the banks. As bad as the great recession was, it could have been so much worse. Fortunately for the US social welfare programs were firmly in to aid those impacted hardest by the recession. Our nation sa... ... middle of paper ... ...(2014, February 24). Retrieved from Pro Publica: http://projects.propublica.org/bailout/list Lowrey, A. (2014, FEBRUARY 21). How the Fed Saw a Recession, Then Didn’t, Then Did. Retrieved from The New York Times: http://economix.blogs.nytimes.com/2014/02/21/how-the-fed-saw-a-recession-then-didnt-then-did/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1 Pettinger, T. (2011 , September 23). Policies to avoid a Recession. Retrieved from EconomicsHelp.com: http://www.economicshelp.org/blog/236/recession/how-to-avoid-a-recession/ Sumner, S. (2011, FALL). Re-Targeting the Fed. Retrieved from National Affaris: http://www.nationalaffairs.com/publications/detail/re-targeting-the-fed Thoma, M. (2013, August 27). The Great Lesson from the Great Recession. Retrieved from The Fiscal Times: http://www.thefiscaltimes.com/Columns/2013/08/27/The-Great-Lesson-from-the-Great-Recession
In this essay, the author
- Opines that the fed would need to create money electronically to buy long-term securities to encourage banks to lend money or offer credit.
- Concludes that the policies and decisions that led to the great recession have taught us that we are not immune to financial downturns or economic busts.
- Cites thoma, m. (2013, august 27). the great lesson from the great recession.
- Explains how the federal reserve bank operates and the different ideologies of economics affect our nation.
- Cites lowrey, a. and pettinger, t. on how the fed saw a recession, then didn’t, then did.
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- The 2008 Economic Recessionexplanatory essayBetween January 2008 and February 2010, employment fell by 8.8 million, the largest decline in American history. The 2008 Recession, which officially lasted from December 2007 to June 2009, began with the bursting of an 8 trillion dollar housing bubble. Job losses during the recession meant that family incomes dropped, poverty rose, and people all over the country were suffering. Things like this don’t just happen. Policy changes incorporated with the economy are often a major factor. In this case, all roads lead to one major problem: Deregulation. Deregulation originating from the Carter and Regan Administrations, combined with a decrease in consumer spending, and the subprime mortgage bubble all led up to the major recession of 2008.
In this essay, the author
- Explains that the 2008 recession, which officially lasted from december 2007 to june 2009, began with the bursting of an 8 trillion dollar housing bubble.
- Analyzes how reagan's approach was a departure from his immediate predecessors. reagan enacted lower marginal tax rates, simplified income tax codes and continued deregulation.
- Explains that the reagan and carter administrations helped cause the 2008 financial crisis. clinton repealed the glass-steagall act which limited the banking industry.
- Explains consumer spending is the amount of money spent by households in an economy. it includes durables, such as washing machines, and nondurables like food.
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- Explains that subprime mortgages are a financial tool that helps those that don't have good credit score, get home loans. the qualities that make them attractive also carry risks.
- Explains how high-risk mortgages became available in the early and mid-2000s, with private-label mortgage-backed securities (pmbs) providing most of the funding of subprime mortgage. when house prices peaked, refinancing and selling became less possible.
- Explains that deregulation was the major factor for the 2008 recession, which started back to the reagan and carter administrations.
- Explains that subprime mortgages were major factors of the 2007-2009 economy collapse. all of america suffered from the 2008 recession.
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In this essay, the author
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- Analyzes how race discrimination has appeared in the great recession, and how it has kept qualified minorities from getting good-paying jobs.
- Explains that a gender pay gap was experienced by women in the united states during the great recession.
- Explains that older workers are discriminated against because of their age and generational differences. the recession is to blame for the rise in age discrimination claims.
- Explains that the great recession was a rough period for the united states. to control the madness, the government had to buy treasury securities and change legislation.
- Analyzes the impact of recession on equal opportunities for minorities and women in the united states, canada and britain.
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In this essay, the author
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- Explains that the overinflated value of homes made middle-class americans feel richer than ever before in the years leading up to 2008.
- Explains that the buildup to the economic collapse began years before 2008 when the financial industry became increasingly careless and government regulation became lenient.
- Explains that the new era of deregulation began what is today known as the shadow banking system due to the prevalence of many nonbank financial institutions.
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In this essay, the author
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In this essay, the author
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In this essay, the author
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In this essay, the author
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- Explains that the recession between 2007 and 2009 was hard for almost every american. the u.s. labor market lost 8.4 million jobs in 2008 and 2009.
- Explains that the "great recession" caused over 46 million to have to live in poverty right now. the child poverty rate has increased in over 30 states since the year 2000, with the southern states feeling the repercussions worst than any other region.
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- Opines that the recession is the only real reason for homelessness. homelessness can be caused by unfortunate personal experiences such as veteran parents who are injured and cant seem to find work or young mothers who don’t have anyone on their side to help them financially.
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- Compares the mental/emotional problems of homeless children with those of their parents. homeless children go hungry twice the rate of other children and have high rates of obesity due to nutritional deficiencies.
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In this essay, the author
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In this essay, the author
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- Explains how the investment groups became greedy and the banks turned back to the mortgage brokers to buy more mortgages. the increase in foreclosed houses caused the price of houses to go down.
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1439 wordsRead More - The Great Recession Essayexplanatory essayWhat caused the Great Recession that lasted from December 2007 to June 2009 in the United States? The United States a country with abundance of resources from jobs, education, money and power went from one day of economic balance to the next suffering major dimensions crisis. According to the Economic Policy Institute, it all began in 2007 from the credit crisis, which resulted in an 8 trillion dollar housing bubble (n.d.). This said by Economist analysts to attributed to the collapse in the United States. Even today, strong debates continue over major issues caused by the Great Recession in part over the accommodative federal monetary and fiscal policy (Economic Policy Institute, 2013). The Great Recession of 2007 – 2009 enlarges the longest financial crisis since the Great Depression of 1929 – 1932 that damaged the economy.
In this essay, the author
- Explains the causes of the great recession, which lasted from december 2007 to june 2009 in the united states.
- Explains the causes of the great recession, which started when the united states was given billions of dollars abroad and financiers conceiving of making a profit.
- Explains that fannie mae backed mortgage bundles called "collateralized debt obligations" to financiers, which than sold to banks, pension funds in the united states and abroad.
- Explains that 40 percent of all u.s. mortgages – 25 million loans were not of low quality known as subprime according to wallison & pinto.
- Explains the effects of the great recession on the u.s. labor market.
- Explains how the u.s. used fiscal and monetary policies to fight the 2008 recession.
- Explains that the u.s. economy has come a long way since june 2009 at the end of the great recession with the usage of monetary and fiscal policymakers.
- Explains the role of moral hazard in the recession and recovery.
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