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Fiscal and Monetary Policies During the 2008 Recession in America

Decent Essays
2008 Recession in America “It is not about how hard you fall, but how you get up and keep going.” Economic recession may be a natural phenomenon in the world’s economies. Every market has its peaks and falls, definitely the United States of America has hers. In 2008, USA experienced another tragic downfall when her market went down and unemployment rate charged up. Millions of workers lost their jobs; from the young, the old, the whites, Asians, Latinos, both men and women. Distress filled every household as prices rose and income fell. The whole country was in turmoil back then. This event had placed the policymakers in nostalgia. The melancholic memory of the Great Depression had them thinking of ways to battle the present state of their…show more content…
The Congress passed the $787 billion American Recovery and Reinvestment Act, which is a temporary inducement which included almost $300 billion for tax cuts and benefits and billions more for sectors such as transportation, energy, and education. This was believed to spur growth since tax cuts are incentives for the firms to produce more. Additional subsidy for other sectors, for instance education would encourage and stimulate spending; less expense for education would help households allot money for other commodities. However, providing these benefits and subsidies for its people has placed a big deficit burden over Uncle Sam’s shoulders. It was difficult to maintain this act. The country incurred big amounts of borrowed money. Yet the benefits were greater than what they cost. The economy slowly recovered from its downturn. We should not ignore the interdependence of markets when it comes to goods and services. The 2008 recession in the United States of America has affected numerous economies all over the world, including the Philippines. America is a superpower; therefore we acknowledge the domino-effect she creates whenever she takes her downfall. This recession has its effects on many countries over Europe. The bursting of the mortgage bubble specifically led to many crises and had its history written over eternity. The effects of this could be read in my second essay. I would like to specifically discuss the effect of the recession to the Philippine economy. As
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