Financial Crisis Rebirth

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Rebirth of the U.S. Economy during the Financial Crisis

Liberty University

July 8, 2016

Rebirth of the U.S. Economy during the Financial Crisis

Introduction A financial crisis is a condition, for various reasons, an organization or organizations lose a vast part of their worth. In many segments of the economy, a financial crisis happens all the time. The terms financial crisis and economic crisis are not interchangeable. The total economy is affected by an economic crisis. A financial crisis may only affect one part of the economy and not have any effect on the other parts of the segments. The financial crisis which began in 2007 was the beginning of a downward spiral for the United State economy
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They were not sited during the financial crisis for any wrongdoing. However, they were known to pressure banks for loans for people who were probably unable to afford a home and would eventually default. NACA was vocal in exposing early signs of Fannie Mae and Freddie Mac’s being allowed to expand “into the sub-prime market mortgage during a hearing before the House of Financial Services Committee in 2000” (Hogberg, 2009, para. 6).
Economic Stimulus Act of 2008 The Economic Stimulus Act was a Congress Act which provided different economic stimuli to lift the U.S. economy and circumvent a recession. There were three parts to the Economic Stimulus Act of 2008: income tax rebate, and provisions for businesses to promote investment. Tax filers received a minimum of $300 and some tax filers received upwards of $1,200 thus decreasing federal taxes by five percent (“What did the 2008-10,” 2010). To stimulate investments for businesses, they were allowed to “deduct the full cost of depreciable business assets in the year the investment was made. Businesses received special depreciation allowance for certain property” (What did the 2008-10,” 2010, para. 3). The Economic Stimulus Act of 2008 also benefited the nontax recipients by increasing their
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The unemployment rate increased from four and a half percent to nearly ten percent in the United States. The Big 3 automakers, especially GM were hit hard by layoffs and production globally. Dealerships, worldwide, had to lay off workers as well. From the later part of 2008 to mid-2009, approximately 38.5 percent of homeowners were not employed. The financial crisis saw the worst unemployment rate since the Great Depression of 1929-1939. More than 15 million workers were unemployed. Approximately 9.5 percent of Americans were employed part time in order to provide for their families. The highest unemployment rate was recorded in the state of Michigan at more than 15 percent. Unemployment among African Americans was almost 16 percent; while unemployment among Latinos reached more than 13 percent. The American Recovery and Reinvestment Act created nearly two million jobs in 2009. This Act was a part of the stimulus packet signed by President Obama in 2009 to boost the economy. Without government intervention, the economic recovery could have been more devastating and lasted for many
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