The And Consequences Of The 2008 Economic Crisis

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There were many causes and consequences of the 2008 economic meltdown from different groups. Parties such as banks, individuals, and the government were all responsible for causing the economic meltdown. One factor was an overdependence on credit (Andrews 2009:1). In addition, struggling businesses relying on the banks also contributed to the 2008 economic meltdown (Gross 2009:18). Also, lax government policies like the Community Reinvestment Act (CRA) contributed to the 2008 economic crisis (Gross 2009:30-31). These were the factors that led to the 2008 economic meltdown. American individuals were among the many factors that led to the economic meltdown in the U.S. in 2008. This proves to be the case as Americans were likely to depend on…show more content…
As a result, consumers were able to buy items that they were unable to afford. Cars were another popular good that consumers purchased. Daniel Gross writes: “Americans bought 16.8 million cars in 2002, and would buy nearly 17 million cars per year for each of the following three years. Car industry sales, which accounted for between 15 percent and 20 percent of US retail sales, had always depended upon the availability of credit (Gross 2009:42).” This points to the fact that consumers took advantage of credit in order to buy cars as it enabled the consumers to take out money in order to pay for a car if they did not have enough of their own money. However, easy access to loans led to dire consequences for individuals. Based on the article by Edmund Andrews, he had a lot of debt and faced the consequences of higher interest rates all while he left his bills unpaid (Andrews 2009:3). “The last thing Chase wants is to foreclose on your home,” JPMorgan Chase wrote us. It assured us that it wanted to “help” and was willing to evaluate us for a number of “alternatives.” If we didn’t “resolve” our payment delinquency, it politely warned, “you will lose your home (Andrews 2009:3).” Based on the article, what was worse than rising debt for individuals who bought homes and did not have sufficient money was the threat of foreclosure when the banks took away the homes of individuals. Individuals who had a harder time making ends
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