Bonus Paper The Great Recession of 2007-2009 was very harmful to the economy of the United states. Many people lost their jobs and were forced to work at lower wages, so the demand for consumer goods dropped. Homeowners were also hurt because the value of housing and real estate crashed. This decrease in wealth pushed back the retirement age for many people. The financial situation was especially worrisome for my personal household during the Great Recession. My parents had gotten a divorce shortly before the recession began, so my dad had to pay my mom alimony. My sister and I chose to keep living in our house with my dad. When the recession came, my father was working at a steel plant, and they were laying off several workers, so he had …show more content…
Economist Nakajima Makoto says that "younger households, lower-income households in each age group, and extremely wealthy households" suffered from "a larger loss than average" in income. This is because the value of housing and stocks declined sharply during the Great Recession. Younger households tend to have a greater proportion of their wealth in housing, while wealthy households tend to invest more heavily in stocks (Makoto 2013). The decrease in consumer demand led to decreased investment in businesses because the businesses were suffering from a lack of demand from consumers, leading to lower stock …show more content…
(2015, July 10). Chart Book: The Legacy of the Great Recession. Retrieved from http://www.cbpp.org/research/economy/chart- book-the-legacy-of-the-great-recession DeGrace, Tom. (2011, Dec. 18). The Housing Market Crash Of 2007 And What Caused The Crash. Retrieved from http://www.stockpickssystem.com/housing-market- crash-2007/ Gustman, A. L., Steinmeier, T. L., & Tabatabai, N. (2012). How Did The Recession Of 2007-2009 Affect The Wealth And Retirement Of The Near Retirement Age Population In The Health And Retirement Study?. Social Security Bulletin, 72(4), 47-66. Makoto, N. (2013). The Diverse Impacts of the Great Recession. Business Review (Federal Reserve Bank Of Philadelphia), 17-29. Wesley, Daniel. (2010). How the Great Ression Has Affected Americans. Retrieved from http://www.creditloan.com/infographics/how-the-great-recession-has-
After all the research on this recessional era, I have concluded that the recession was not as extreme until the terrorist attack, which deeply affected the United States. The recession became worse after the attack, and many things were affected by this, including jobs, the government, and families. The fiscal and monetary policies would have been more affective as long as the terrorist attack wouldn’t have happened. The government handled the recession as well as possible, and the policies enforced worked, but not as fast as it could have. After working towards strengthening the economy for three years after the recession had officially ended, the government had finally gotten everything back on track.
The Web. 16 Mar. 2014. The 'Standard' of the 'Standard'. http://www.harp.gov/About>. Agricultural Adjustment Administration (AAA). "
After a generation of portfolio managers and investors profiting from decades of favorable returns on stocks, they believed the modern economy was impervious to major calamities (“Rethinking” 20). As inflation rates fell from record highs in the late 1970s and early 1980s to the record lows that they are today, interest rates followed, enabling Americans to borrow more money from lenders which, in turn, increased housing prices to all-time highs (“Rethinking” 21).
Since being founded, America became a capitalist society. Being a capitalist society obtains luxurious benefits and rather harsh consequences if gone bad. In a capitalist society people must buy products and spend money to keep the economy balanced, but once those people stop spending money, the economy goes off balance and the nation enters a recession. Once a recession drastically takes a downturn, the nation enters what is known as a depression. In 2008 America entered a recession and its consequences were severe enough for some people, such as President Barack Obama, to compare the recent crisis to the world’s darkest economic depression in history, the Great Depression. Although the Great Depression and the Great Recession of 2008 hold similarities and differences between the stock market and government spending, political issues, lifestyle changes, and wealth distribution, the Great Depression proved far more detrimental consequences than the Recession.
Throughout history, there have only been two major economic downturns. The Great Depression and the Recession of 2008 both occurred due to poor financial policies and excessive spending. Both events left people with a sense of hopelessness and vulnerability. A comparison of the Great Depression Era and the Recession of 2008 reveals similarities in causes and effects economically, socially, and politically. Life after the war took a toll on many Americans.
Over the course of history, America has dealt with its share of economic troubles. One of America’s darkest moments, economically, came in the year of 1929. On October 29th, 1929 America’s stock market crashed. This would become what we now know as the Great Depression. The Great Depression lasted approximately ten years. The Great Depression affected the entire country. Seven decades later we experienced what is known as the Great Recession. This also affected many Americans economically. Both of these economic meltdowns share commonalities.
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.
It is a common argument between people today, which historical American event had a greater impact on the United States and world. The Great Depression in the twenties and thirties, or the Recession in 2007 to 2009. The Great Depression was an economic slump in North America, Europe, and other industrialized areas of the world. The Great Depression began in 1929 and lasted until about 1939. It was the longest and most severe depression ever experienced by the industrialized Western world. The Recession is known as the sharp decline in economic activity during the early 2000s, this is generally considered to be the largest downturn since The Great Depression. The term “Great Recession” applies to both the U.S. recession – officially lasting from the December of 2007 to the June of 2009 – thus, ensuing global Recession in 2009. The Great Depression was far more severe than The Recession because of the failing of banks, a global economic down turn, and high unemployment rates.
During the Great Depression the rich was giving most of there money to the government. ”Entrepreneurs had to hand over more than half of any income above a certain level”.(Burton W. Folsom pg.3). The poor just got more poor ,the rich was no longer even rich. The unemployment rate was twenty-five percent back then. That is way higher then today the unemployment rate is eight point two percent . Also,the stock market crashed which left the banks to shut down because banks use to loan customers money and invest it into stocks . The Great Depression didn't just affect the United States it affected whole world which is known as a global depression. The Great Recession was just the United States alone in need of financial backup . Now, let me
The Bureau of Labor Statistics characterizes a recession as a general slowdown in economic activity, a downturn in the business cycle, and a reduction in the amount of goods and services produced and sold. But what usually causes this slowdown to begin with? Each recession has its own specific causes, but all of them are usually preceded by a period of irrational exuberance which is part of the expansion phase of the business cycle. The most recent one, which officially lasted from December 2007 to June 2009, produced the greatest US labor-market meltdown since the Great Depression. This Great Recession began with the bursting of an 8 trillion dollar housing bubble. Irrational exuberance in the housing market led many people to buy houses they couldn’t afford because the thought was that housing prices could only go up. The bubble burst in 2006 as housing prices started to decline, threw many homeowners off guard, who had taken loans with little money down. When the realization set in that they would lose money by selling the house for less than their mortgage, they foreclosed. This triggered an enormous foreclosure rate which caused many banks and hedge funds to panic after realizing the looming huge losses due to the buying of mortgage-backed securities on the secondary market. By August 2007, banks were afraid to lend to one another because they did not want these toxic loans as collateral. This led to the $700 billion bailout, and bankruptcies or government nationalization of Bear Stearns, AIG, Fannie Mae, Freddie Mac, IndyMac Bank, and Washington Mutual. Consumer spending experienced sharp cutbacks due to the resulting loss of wealth. The combination of this along with the financial market chaos elicited by the bursting of th...
The Great Recession was a resulting loss of wealth that led to sharp cutbacks in consumer spending. This loss of consumption, combined with the financial market chaos led to a collapse in business investment. Massive job loss followed as consumer spending and business investment dried
What 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.
The Great Depression is known as the greatest time of recession in American history. Many factors contributed to this hard time. With the stock market boom in the 1920’s, our country was filled with optimism for the future. Although there were signs of problems to come former President Herbert Hoover was just as convinced as the nation that they were only going through a rough patch and would be back on their feet in no time. That was until the stock market crash of 1929, which marked the beginning of the Great Depression. The stock market crash led to bank and company failures. Many people became unemployed and had to leave their homes. Families also had to move away because of the drought that caused dust storms and ultimately the Dust Bowl. Soon enough, thousands were migrating to find jobs elsewhere. Eventually when former President Franklin D. Roosevelt was elected into office, he presented America with “The New Deal,” the plan that would save America and bring the nation up and out of the recession.
The Great Depression was an incredibly trying time for Americans, especially American farmers. After years of plowing and overgrazing, the land was no longer able to support life, and dust storms swept the nation. Acre after acre of crops were destroyed by the dust storms that plagued American farmland during the 1930s. Farmers were forced from the land they had been sharecropping for generations. Sharecropping land all across the nation was foreclosed upon by the banks as they were no longer making any profit. On top of all this, the stock market crashed, leaving those once wealthy broke, or worse, deeply in debt, leaving them with nothing but the clothes their backs. A few of those who lost everything became hobos, stealing rides on trains
The recession of 2008 was one of the worst since The Great Depression. It began in 2008 and lasted well beyond 2010. Many jobs were lost and with no signs of the economy regaining the prosperous inclined in the economy, indivudales were accustomed to. Top organizations were closing their doors because of the mortgage crisis. This crisis was felt all over the world because many banks and business sectors had invested in the mortgage debts. The automobile industry was later hit by this crisis in 2009. Top manufacturers such as General Motors and Chrysler went bankrupt because the consumer would not spend money. By the end of the year, the government had to bail out both the bank and automobile industry (Soloman, 2011). The Dow jones