Great Recession Summary

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 bursting of the housing bubble, known more colloquially as the 2008 mortgage crisis, was preceded by a series of ill-fated circumstances that culminated in what has been considered to be the worst financial downfall since the Great Depression. After experiencing a near-unprecedented increase in housing prices from January 2002 until mid-2006, a phenomenon that was steadily fed by unregulated mortgage practices, the market steadily declined and the prior housing boom subsided as well. When housing prices dropped to about 25 percent below the peak level achieved in 2006 toward the close of 2008, liquidity and capital disappeared from the market.

A recession occurs when a country’s real GDP begins to shrink. Even a milder economic slowdown in which GDP continues to grow, but very slowly can create unemployment and dislocation. GDP and employment are positively correlated. As GDP rises

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.

A recession is characterised by a period of at least two consecutive quarters of negative growth. During a recession, demand and supply of goods and services in the economy contracts. The UK economy contracted by 1.5% in the last quarter of 2008 and the Gross Domestic Product experienced its biggest fall since the second quarter of 1980 (Kowelle 2009). This is the first time since the inception of the NMW that employment has fallen. Unemployment is rapidly on the increase.

According to the financial definition, a recession is a significant decline in activity spread across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income, and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's GDP. (Dictionary.com) A less official and more realistic definition of an economic recession is the social perception of the state of the economy at a given time. The collective beliefs of the public, mainly businesses and consumers, drive the social perception of whether things are seen as positive or negative. Unfortunately

The United States suffered its worst recession in the postwar period between the years December 2007 and June 2009. Every sector of the United States economy was severely affected. Many people became unemployed. Though macroeconomists had predicted a stable economy, the Great Recession happened. Policy makers such as Congress became responsible for the economy's recovery. The Great Recession had lots of effects. Recession involves a fall in Gross Domestic Product (GDP). GDP is the total value of both goods and services produced within a country. When a country's GDP falls, there is lower income for people living in the country. This results in high costs of living and increase in poverty. Many people lost their jobs. The category of people

The Great Recession which lasted from 2008 to 2010 is often regarded as the greatest economic crisis since the Great Depression which took place during the 1930s. The causes of both crises can be said to be similar as both lie in the actions of the federal government. While the crash of the stock market in 1929 is said to be one of the major causes and sometimes even the main cause of the Great Depression, there are also other circumstances that led to this economic crisis. Bank failures during the 1930s also added to decline in the economy. The failure of hundreds of banks caused people to lose their savings and businesses to lose their operating capital. With the crash of the stock market, there was also a reduction in purchasing in the economy (consumer demand). A reduction in consumer demand led to a reduction in production and hence a reduction in the workforce. With a reduction in production and the workforce, the unemployment rate rose drastically to around 25%. Due to the number of businesses failing, President Hoover signed into law the Smooth-Hawley tariff to help protect the failing businesses. However, this created unintended consequences as trade was stifled between America and foreign countries, further adding to America’s economic crisis.

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

A recession is full-proof sign of declined activity within the economic environment. Many economists generally define the attributes of a recession are two consecutive quarters with declining GDP. Many factors contribute to an economy's fall into a recession, but the major cause argued is inflation. As individuals or even businesses try to cut costs and spending this causes GDP to decline, unemployment rate can rise due to less spending which can be one of the combined factors when an economy falls into a recession. Inflation is the general rise in prices of goods and services over a period of time. Inflation can happen for reasons such as higher energy and production costs and that includes governmental debt.

Recession is a term that looms over any society at some point or another but what does recession mean for the economy, in short it is an economic decline. This essay will examine the meaning of recession and will discuss the fiscal and monetary policies that are used to pull economies out of recessions. The great Recession of 2008 will shed light on how these policies were successful at restoring economic growth and reducing unemployment.

As the country rises out of the depths of the “Great Recession”, there are many signs that the economy is improving. Employment, home sales and automobile sales are increasing and a NBC/Wall Street Journal Poll shows that 73% of the country feels that the economy has started to recover or has stabilized. However, there is a phenomenon occurring that is causing a strain in the ability of the country to completely shake the hold of the recent economic downturn. At a greater rate than previously seen, the increase in income for the so called “super rich” with yearly household income over $352,000 far surpassed the increase that went to others. According to the New York Times, “In 2010…a dizzying 93 percent of the additional income created in the country - $288 billion – went to the top 1 percent of taxpayers…(While) the bottom 99 percent of income earners received a microscopic $80 increase…the top 1 percent had an average increase of $118,214.32.”

The housing market crash, which broke out in the United States in 2007, was caused by high risk subprime mortgages. The subprime mortgage crisis resulted in a sudden reduction in money and credit availability from banks and other lending institutions, which was referred to as a “credit crunch.” The “credit crunch” and its effect spread across the United States and further on to other countries across the world. The “credit crunch” caused a collapse in the housing markets, stock markets and major financial institutions across the globe.

This recession has been the biggest economic struggle in my lifetime. Everything that could go wrong went wrong. The event that led to this recession is the housing crisis, where banks were giving out loans, almost without any restrictions. People were getting involved in one of the best economic times in our history. Confidence was everywhere and the ideal mindset hit everyone. When the economy hit all new highs, people thought the supply and demand chain would continuously rise. The business cycle seemed to be a lie to many Americans. However, the business cycle is real and the world lives a part of it everyday. When deregulation became extreme and private companies, especially banks, got all the power, nothing could stop them

Recession is defined as the economic slowdown or decline characterized by slowing down of trade, a magnitude decline in the GDP, and a decrease in employment usually lasting between 6months to a year. This was the situation in the USA the hardest times being from 2008 through 2009 and the early months of 2010. America is still recovering from the effects of the recession that the country experienced from 2007 to 2009.