Analysis Of The Great Recession

The uppermost classes were not distressed about this because they were abundant in wealth and lived comfortably despite the Great Depression. Many prosperous citizens were even oblivious to the fact that millions of Americans were suffering during this time. Around forty percent of the people in America did not encounter substantial misfortune (Smiley 1). Average spending in the United States dropped because people did not possess money to expend. This quickly led to the failing of businesses (Smiley 1).

First, we need to understand how the Great Recession occurred. It all started with President Ronald Reagan in the 1980s. Reagan was famous for his supply-side economic views (Amadeo 1). He used top-down economics meaning he used government intervention to give businesses tax breaks and subsidies to create economic growth. With this he also started a continuing phenomenon to deregulate Wall Street. He believed this would create vast economic growth and it did. But it created a bubble and it

The recession of 2008 is also called the ‘Great Recession’, said to have begun in December 2007, and took a turn for the worse in September 2008, and it was a severe economic problem expanded globally. This recession affected the world economy, and is said to have been the worst financial disaster since the Great Depression. The decline in the Dow Jones this time was -53.8%. Since the official start of the recession in December 2007, and through June 2010 there have been about 2.3 million homes foreclosed in the United States. In 2012, the state with the most foreclosures in January alone was California, with 51,584 houses being repossessed. Unemployment during this collapse was 8.5%, and continued to increase to about 10% as of 2010. People’s reaction to this recession was a huge decrease in spending and borrowing from banks, but an increase in saving.

Wealth and Income Inequality in America The United States of America was founded upon the ideals of freedom and equal opportunity for all individuals. Many people strive to achieve the American Dream by enhancing their socioeconomic status. Today, many people argue that these rightful values are no longer relevant due to the growing income and wealth disparity between different social classes. Income and wealth are two social issues that are commonly misinterpreted; although the two concepts are related, the overall concepts are a little bit different.

The United States entered “The Great Recession” in December of 2007. Its impact was felt by nations all around the world. This event triggered the loss of 8.8 million jobs around the country and created a sense of economic instability. I’m very interested in finance and stocks, so this provided an incentive to be careful with my purchases and investments

The stock market crash in 1929 tanked the country’s economy and triggered a severe recession. The crash basically leveled the income of every American income because so many people lost the money that invested in the market. As the economy improved, the gap between the rich and the poor widened (Leubsdorf). After World War II, unions became common (workers were given fair treatment) and a minimum wage was enacted to help close the gap, but eventually the top percent was the only group of workers that could earn more money. The middle and lower classes suffered. After WWII ended in 1945, the country’s top 1 percent held 10 percent of the nation’s total wealth (Rugaber and Boak). This statistic grew when only the wealthiest Americans increased their incomes. The rest of workers saw little to no economic growth.

The Great Recession of the 2000’s is something many of us have been affected by in some way or form. From the real estate bubble to the acts of major firms on Wall Street-there were numerous factors that lead to this recession. The United States Government is to blame in large for what happened to the economy in the early part of the 2000’s. Major firms such as Merrill Lynch, Goldman Sachs, and AIG tried to used the failing economy as a huge paycheck to their CEO’s, payouts made partially by the US Government’s bailouts. The government should have allocated money to the people who were struggling, not continue to feed the “hand that bit them.”

The Great Recession that began in 2007 introduced people to a feeling not since felt since the Great Depression of the 30’s and 40’s. It reintroduced a new generation to the realization that we cannot take anything for granted. It sprung up fears in a fearless population, and out of it born a stress like no other. We can harness that stress; we own it as individuals, employees, as employers, as caretakers of the future.

In 1978, the richer household was 220 times wealthier than the average household. Today, the richer household is an astonishing 1,220 times wealthier than the average household. Robert Putnam, a Public Policy Professor at Harvard University said the following about the situation: “We’re moving toward an America that none of us has ever lived in, a world of two Americas, a completely economically divided country.” This may seem dramatic, but in many ways, this is a new reality for millions of Americans. We have begun to settle for a lower standard of living blaming our lack of wealth on “the poor economy.” This is an erroneous position which the top 1% thrives upon.

Similarly, the Great Recession was due to consumer spending cutbacks and a drop in demand for the establishment of new housing. In the two decades previous to 2008, the American growth rate was very high. Their household needs also became very high, which made demand increase. Spending was at a high. However personal income was decreased. The consumers then had to borrow money from the banks. This gave the consumers debt. So, when the house prices rose, banks stopped loaning money to people and the people decreased their spending. This happened because the people were not able to pay the banks back. People also cut back on buying or making new houses, so household demand dropped. Many say that this decrease caused the Great Recession. Housing was one of the main subjects that many believe, caused the Great Recession. “Subprime” mortgage availability and low interest

The uncertainty of the financial industry and the nightmare of the housing bubble caused significant damage to the health of the economy. Businesses were unable to get loans, and employees were laid off. State governments suffered due to the high volume of debt and rising rates in unemployment forcing them to make major cuts to their budgets. All of this had a remarkable impact on the global economic climate as well that kept spreading, and many compared this recession to the Great

Before learning more about the Great Recession and other depression that had taken place in our country, all I knew was a little bit about the Great depression and only a little bit about the Great Recession. All of the depression, recession, and other problems that was happening, I was in school only hearing a little bit of what was going on. Now knowing that our country been though a lot of problems really made me pay more attention to see what is going on. The Great Recession started in December of 2007 when President Bush was in the House. There where so many

Everybody in the United Stated was affected by the recession that began in December of 2007 and spanned all the way to June 2009. Even though the recession is over, many people are still being affected by it and have still not been able to recover from the great recession. “The recent recession features the largest decline in output, consumption, and investment, and the largest increase in unemployment, of any post-war recession”. Many people lost their jobs due to the recession and some of them are still having a hard time finding jobs and getting back on their feet. Businesses

The middle class in America has been shrinking particularly over the last decade to the current time. This is a trend that was last experienced in the 1930s during the great depression due to the altered economic trends in the American system. The shrinking of the middle class therefore led to the expansion of the poor and the rich gap due to the drop in the income within the middle class. Aaron Smith (2012) indicates that the wealth of the middle-income households was in their homes, hence the housing bust terribly affected their 'nest eggs'. He further indicates that the mean net worth of the middle class (which includes assets, such as a home or retirement account, minus debt) fell by a significant 28% as compared to the wealthy class that actually edged higher by 1%. This was due to the fact that the upper class was able to cushion itself from the effects of the housing bust due to he greater diversification of their wealth and the fact that they tied much of their wealth on bonds, stocks and several other investments.

In chapter one of Joseph E. Stiglitz, book; “The Price of Inequality:How today’s Divided Society Endangers Our future.” He talks about America’s one percent Problem in which he includes the 2007- 2008 financial crisis and the Great Recession America went through that affected millions of American families. As a result a lot of families lost their homes, lifetime savings, and jobs. During the Great Recession the middle aged people were greatly affected as many were straight out of college with a lot of debt on them that they could not pay off because jobs were so scared making it very difficult to find employment. Many families who had lost their jobs, and homes had to move in with family members or friends in order to be able to survive this