2001 Recession

In 2001, after the longest period of economic expansion the country has witnessed historically, the United States of America entered into its tenth recession since the end of World War II. A recession transpires when at least two quarters of a year are plagued by a sharp downturn of the country’s gross domestic product or GDP. More specifically, when a recession occurs, unemployment increases resulting in less consumer spending which is associated with poor business performances. Studies by the National Bureau of Economic Research (NBER) concluded that during March of that year, a pinnacle in business occurrences declared the end of the expansion and the arrival of an inevitable and damaging though short recession. In a state of urgency, the president at the time, George Bush, encouraged Congress to ratify a stimulus package plan which would seek to improve the standing of the economy. The NBER theorized that the infamous act of terrorism which took place on September 11th placed an even greater strain on the already damaged financial system because it wreaked havoc on many markets and businesses such as the airline industry. Many times, a recession occurs due to economic disasters that are enough of an impact on society to disrupt expenditures of large-scale businesses and individual citizen households. Consequently, aggregate demand decreases along with employment. Factors such as international conflicts, technological fluctuations and the endeavors of monetary legislators all contribute to the overall American economic status.

When a recession does not occur, it can be concluded that the economy is not experiencing a true business cycle but is in a continuous expansion. The rate at which the economy is evolving can be assesse...

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...ommenced interest rate cuts because it was already at an all-time low. Federal income and estate taxes were slashed during President Bush’s presiding term in office. Trillions of dollars along with federal surplus has been replaced with diffident debits. As stock markets decline, spending may also lesson. Business capital assets can aid the economy during recessions, though it grows at a slow pace. The country’s national return from economic decline will mirror that of Washington’s because the capital’s economy profited drastically more than most states from stock option revenue and the high technology industry, software and dot com bonds. Before September 11th, the majority of air travel companies were already experiencing monetary problems thus any financial assistance offered to them by the federal government would have been improbable in quickening the rebound.