The Great Recession Of 2008

1123 WordsSep 28, 20155 Pages
The Great Recession of 2008 Debra Turner ECON 102 Professor, Shahrokh American Public University September 26, 2015 The Great Recession of 2008 Recession is a significant decline in real GDP, real income, employment, industrial production, and wholesale/retail sales, which last more than a few months. (Economic recession, n.d.) Further, a recession typically begins after a peak in the economy and ends at the trough, however, “the start and end dates are determined by the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER).” (Economic recession, n.d.) The Great Recession-which officially lasted from December 2007 to June 2009-began with the bursting of an 8 trillion dollar housing bubble. The resulting loss of wealth led to sharp cutbacks in consumer spending. This loss of consumption, combined with the financial market chaos triggered by the bursting of the bubble, also led to a collapse in business investment. As consumer spending and business investment dried up, massive job loss followed. In 2008 and 2009, the U.S. labor market lost 8.4 million jobs, or 6.1% of all payroll employment. (The Great Recession, n.d.) • Fiscal policy is the use of government revenue (taxes) and expenditure (spending) to influence the economy. (Weil, 2008) Fiscal policy is “used to stabilize the economy over the course of the business cycle.” (Fiscal policy, n.d.) Examples of both of these according to National fiscal policy response to the Great
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