Recessions and recoveries throughout the years seem harder to comprehend each time. This is because of the complex issues that must be resolved during them. The issue no longer just lies with unemployment. One must keep in mind, housing prices, taxes, demographic issues, inequality ratios and the reason for unemployment. A fix all policy is not a possibility with this recession and recovery. As we continue throughout this recovery and continue to make resolutions we must understand what the root causes are and how to avoid them in the future.
During a time of recession people try to figure out what the root cause is for unemployment. “There are now 12.8 million workers who are looking for work and cannot find it; the figure nearly doubles if you include workers who are part-time but want to be employed full-time, and workers who want to work but have stopped looking” (Rampell 1). Two options come into play these are, structural unemployment and cyclical unemployment. Structural unemployment is caused by changes in the economy like the technological revolution or moving jobs abroad. With the technological revolution, one sees a computer and one operating person taking the job of many who once did it manually. In addition, due to the scare of the recession many companies cut their pay rolls and invested in technology to insure in the future the success of their business. Businesses also moved production abroad so products could be made cheaper than in America. Structural unemployment is more challenging to fix because it require matching of people’s skills they have been trained, higher education and progress. Structural is not a permanent problem, like seen during World War II the G.I. Bill was introduced turning around the stru...
... middle of paper ...
...n the recession is hard to understand is because the diverse actions that must take place to create a solution. We can’t just recycle the same policies like the New Deal again we must be able to adjust and fit it to today society.
Works Cited
Applebaum, Binyamin. "Are the Good Times Never Coming Back?" New York Times Economix 22 Mar. 2012: n. pag. Web. 15 Feb. 2014.
Applebaum, Binyamin. "Housing Prices and Income Inequality." New York Times Economix 17 Oct. 2012: n. pag. Web.
Bartlett, Bruce. "Are the Bush Tax Cuts the Root of Our Fiscal Problem?" New York Times Ecnomix 26 July 2011: n. pag. Web.
Rampell, Catherine. "Comparing Recessions and Recoveries: Job Changes." New York Times Economix 3 Feb. 2012: n. pag. Web. 15 Feb. 2014.
Rampell, Catherine. "New York State Leads in Income Inequality." New York Times Economix 20 Sept. 2012: n. pag. Web. 15 Feb. 2014.
Palley, T. I. (2012). From financial crisis to stagnation: the destruction of shared prosperity and
"Wealth Inequality in the United States." Wikipedia. Wikimedia Foundation, 18 Apr. 2014. Web. 19 Apr. 2014.
Stone, Chad, Danilo Trisi, Arloc Sherman, and William Chen. "Center on Budget and Policy Priorities." A Guide to Statistics on Historical Trends in Income Inequality. Center on Budget and Policy Priorities, 6 Nov. 2013. Web. 03 Dec. 2013. .
Throughout all of my research over the recession of July 1990-March 1991 I have concluded that it was not one of the largest recessions the United States has ever seen, but it was also not the smallest. This recession was only eight months long and did some damage, but not a lot. The Gulf War had the biggest impact on this recession along with the oil spill causing a rise of oil prices. The economy hit a low point and was not able to come out of it until the following year after the recession had already technically ended. Unemployment rates were at a low point towards the ending of the recession and because companies were hesitant about hiring new employees’ unemployment did not start getting better until the following year after the recession ended.
December of 2007 saw the beginning of the worst economic downturn in memorable history; not since the end of the Great Depression in 1939 has the world seen such a devastating and long-lasting economic breakdown. The Great Recession shook the public’s faith in the capitalist system and silenced those who claimed a modern economy was impervious to another broad collapse like the one in 1929. Discontent and mistrust from the public has built not only with large corporations and the financial sector, but also with the government whose legislature and policies in recent decades seem to coincide with the interests of private corporate power-houses. These lenient policies contributed directly to the recession that affected individuals across the globe. Stunted wages, increased poverty,
Waggoner, John. "Is Today's Economic Crisis Another Great Depression?" USA Today. N.p., 4 Nov. 2008. Web. 7 Mar. 2014.
Every few years, countries experience an economic decline which is commonly referred to as a recession. In recent years the U.S. has been faced with overcoming the most devastating global economic hardships since the Great Depression. This period “a period of declining GDP, accompanied by lower real income and higher unemployment” has been referred to as the Great Recession (McConnell, 2012 p.G-30). This paper will cover the issues which led to the recession, discuss the strategies taken by the Government and Federal Reserve to alleviate the crisis, and look at the future outlook of the U.S. economy. By examining the nation’s economic struggles during this time period (2007-2009), it will conclude that the current macroeconomic situation deals with unemployment, which is a direct result of the recession.
Belsie, Laurent. “The Causes of Rising Income Inequality.”.N.p., 5 Mar. 2009. Web. 30 Apr. 2014
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...
Frank, Robert H. “Income Inequality: Too Big to Ignore.” They Say, I Say: The Moves That Matter
Sutter, John. “What is income inequality, anyway?” CNN. 29 Oct. 2013. Web. 13 Feb. 2014.
In December 2007, the United States of America experienced a very scarce yet appealing setback. In fact, because of this specific dilemma between 200,000 and 500,000 were left unemployed and without a stable home. The national Bureau of the Economic research defined this nationwide downfall as “The great recession”. According to the U.S Bureau of labor statistics the unemployment rate has not made a drastic improvement since the start of the great recession. Unemployment has become that is still rising today with a slow rate of change. Unemployment is usually expressed as a number or as a percentage of a larger number. Although it has been ambiguous who has to be included in the percentage, there are members of society without a job, for whom it is certain that should not be added. Officially the unemployed are the people who are registered with the government as willing to work and able to work at a going wage rate but can’t find suitable employment despite an active search for work. In the article “why long-time employment can’t get back on track”, the author begins speaking on a ...
In a recap, the three policies introduced, the Unemployment Reformation Act of 2059, the Infinite Education Opportunities Program Act, and the Unity Tax, will be a vital part in restoring and surpassing expectations for decreasing the percentage of Americans unemployed by ten to fifteen percent within the next six to eight months. I believe that with these policies the chances of a recession will not occur for a long period of time. For that matter, a recession may not occur again depending on how successful the unemployment plans develop. Nevertheless, I predict that by the year 2109 the employment rate for Americans will reach eighty-three to eighty-five percent.
In December 2007 The National Bureau of Economic Research (CNN) said that the United States of America had fallen into a recession. The recession meant that people were loosing jobs and that people were spending too much money and even money that they did not have. A major reason that the United States fell into the recession was because banks and private businesses were giving credit to people who could not afford to pay back or had a bad credit to begin with. This was a major problem to all types of busin...
Unfortunately, there are many Americans out of work in today’s current declining economy. Unemployment can be defined as a person who is out of work involuntary, not by choice. These people are looking jobs and available to start work. Being unemployed can be disheartening and deciding what the next step is can be challenging. Underemployed can be described as being inadequately employed, such as a low-paying job that requires fewer skills than one possess. (Daly, Hobijn, and Kwok 2015) Making ends meet can be difficult for one who has been affected by this economy over the past few years. America still has a high unemployment rate since the decline of the current job market. And many Americans are struggling to establish the skills needed for employment, or the underemployed are force to lower they skill to make a profit. America’s economic status has force the underemployed and unemployed to make ends meet with the current jobs available. And last but not least some have also utilized these difficult times to venture into new discoveries to make life hassle free. So, we wonder is Americans giving up in today’s economy or do they settle for lower end job to establish a steady income to make ends.