The 2008 Economic Recession

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The 2008 Recession Between 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. Looking back to the Carter and Reagan Administration’s, you can begin to see where the Recession originated from. Prior to the Reagan administration, the United States economy experienced a decade of rising unemployment and inflation. Political pressure favored stimulus resulting in an expansion of the money supply. Reagan wanted to increase defense spending while lowering taxes, Reagan's approach was a departure from his immediate predecessors. Reagan enacted lower marginal tax rates in combination with simplified income tax codes and continued deregulation. During Reagan's presidency the annual deficits averaged 4.2% of GDP after inheriting an annual deficit of 2.7% of GDP in 1980 under President Carter. The real Shelinsky 2 inflation rate of growth in federal spending fell from 4% under Jimmy Carter to 2.5% under Reagan. Not only did Carter and Reagan Administrations help cause the Recession, President Clinton helped. “Clinton then established official government poli... ... middle of paper ... ... Consumer spending and Shelinsky 5 subprime mortgages were major factors of the collapse of the 2007-2009 economy collapse. All of America suffered from the 2008 recession. Works Cited "Subprime Mortgage Crisis - A Detailed Essay on an Important Event in the History of the Federal Reserve." Subprime Mortgage Crisis - A Detailed Essay on an Important Event in the History of the Federal Reserve. N.p., n.d. Web. 04 May 2014. "World Socialist Web Site." GDP, Consumer Spending Contract as US Plunges into Recession -. N.p., n.d. Web. 04 May 2014. "Investopedia - Educating the World about Finance." Investopedia. N.p., n.d. Web. 02 May 2014. "The Great Recession." State of Working America. N.p., n.d. Web. 03 May 2014. "Hard times." The Economist. The Economist Newspaper, 25 Oct. 2011. Web. 04 May 2014. "Consortiumnews." Consortiumnews. Robert Perry. Web. 21 May 2014.

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