Understanding the Economic Recession in America

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The economic recession of the late 2000s has been called the greatest economic downturn our country has faced since the Great Depression. American businesses and banks are failing, foreclosures are spreading like wildfire, and unemployment numbers have reached double digits. Under our current president, many are optimistic, but many others are fearful for the future. Economists have different speculations regarding the causes of the “Great Recession”. Some blame it on higher prices for necessities like oil. Others blame the recession on the burst of the real-estate bubble, inflation, and lacking government regulations on big businesses. Economic experts are also debating on possible solution to end the recession. It is evident that the recession was caused by a combination of different factors, like the burst of the housing bubble and a global expansion in prices. The Obama administration must be instrumental in its attempts to end the current economic crisis by investing in green technology and lowering tax rates.

In order to fully understand the economic recession, it is important to highlight the economic conditions that were established before the recession officially began. Commodities like food and oil reached incredibly high prices while taxes remained high and family incomes remained stable (Rubin). These events forced families to tighten their wallets and their budgets. Also, the sub-prime mortgage crisis occurred: many Americans were issued mortgages in which “little to no down payment was made by the borrowers to buy houses, cars, etc”. Homeowners relied highly on credit; it was even given to low income families. Mortgage rates increased until they became too costly in relation to the stable American income...

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...n order to revive the American economy.

Works Cited

Foster, J.D. “Economic Recovery: How Best to End the Recession.” WebMemo. 6/5/09

“How to End the Recession”. The Nation. 6/7/09

“Labor Department official analyzes May unemployment numbers”. Business Journal.

6/7/09
Rubin, Jeff (May 27, 2008). “The New Inflation” (PDF). StrategEcon (CIBC World

Markets).
Retrieved on 2009-01-04>.

“What Caused the Recession?”. Millionaire Acts. 6/4/09

“What Really Caused the Recession?”. Money Hacks. 6/4/09
Hacks.com/2009/03/what-really-caused-the-recession.html>

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