Great Recession Research Paper

Decent Essays

The Great Recession (Option 2) The Great Recession happened around 2008 and lasted throughout 2010. It resulted in job losses, unemployment and underemployment, falling income and a rise in poverty and lastly, a collapse in the real estate market for mortgages. A recession is defined as when a country experiences two or more quarters of contraction in their economy. During this time, the interest rates were lowered so it was easy and cheap for people to get money. Cheap money encouraged people to spend in order to help the economy grow, but people got careless with the low interest rates so they started over spending more than they needed and that alone, along with the negative savings rate, lead to the recession in America. The mortgage meltdown happened when lenders began to accept people who were not normally qualified for them. The lenders offered the risky borrowers insanely low interest rates for property. In the begging the interest would be low and throughout the time they spiked really high so that the people involved …show more content…

Many individuals who had any type of accounts in these banks were uneasy due to the situations they were facing, so the Feds had to step in to ensure than people’s money were insured in case of any sudden losses. People lost significant amounts of money due to the market’s shortcomings and it affected the entire country for a few years. As a certain type of aid, the government extended the unemployment benefit time up to 99 weeks. Several millions of people fell under the category and were eligible for this aid, which eventually resulted in calling them the 99-ers. This gave them a chance to survive until they could figure something out and get back on their feet again, and tend to their families. But even though they go these benefits, it still wasn’t enough to cover all the costs they needed to be

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