The Great Recession Of The United States

Max: Hi I’m Max Lessins. This is Crash Course for economics and today we’ll be discussing the Great Recession, focusing on the fiscal and monetary policies used to recover from the 2008 economic meltdown.

At the end of the 20th century, it was clear that the United States national economy was on a incline. The U.S began winning the worldwide arms race, holding 50% of the world weapons stockpile (Taylor 10). Capitalism, the main trademark of the United States economy, spread like a wildfire across the majority of the world (Taylor 10). To the uneducated ear, news like this sounds great; the United States is slowly taking over the world. However, this insane growth was actually poising the U.S. for an extreme downfall in the coming years of the early 21st century. The major downfall would come to be known as the worst recession in our history since the infamous Great Depression.

In 2008, the housing market crashed and America fell into a recession. Many Americans lost their homes. Many investors lost large sums of money, and overall the economic recession hurt America as a whole. Today, we see that the stock market is more regulated than it was in 1929 with the Great Depression and 2008 with the Great Recession, but it is still not regulated as much as it previously was. In 1999, portions of the Banking Act of 1933, more commonly known as the the Glass-Stegall Act, were repealed. The repeal of the Glass-Stegall Act in 1999 sparked the Housing Crisis of 2005 and ultimately led to the Great Recession that America experienced in the 2000’s.

A budgetary stimulus is a necessity to help avoid recessions. Fiscal policy is when a government adjusts its’ spending levels and tax rates in order to impact the nation’s economic status. It is linked to the monetary policy which involves a bank and affects the nation’s money source. When there is an increase in unemployment and the economy is soon reaching a recession, the fiscal policy will help maintain the economy. The fiscal policy will decrease taxes and widely promote government spending. On the other hand, when unemployment is declining and prices are escalating, the policy will reduce government spending and raise the prices on taxes. The Great Recession was a horrific economic crisis that led businesses and buyers to drastically

Ever since World War II the United States has experienced many recessions. There have been many terrible recessions that have hit this great country hard. What is a recession people may wonder? A recession is a significant decline in activity 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 gross domestic product (GDP). Although, the recession of 2001 wasn’t a dramatic and horrible recession, it was the end of the longest expansion our country had seen since WWII. The expansion following the recession of 1991 was 10 years up until this recession of 2001. Furthermore, this recession was difficult and was hard to deal with and overcome, because during the time of this recession our country experienced 9/11.

The Great Recession in 2008 led to a huge crisis in the United States economy. This recession almost led to the entire collapse of the United States economy due to the constant unstable changes in legislation, regulation, along with the changes in fiscal and monetary policies. Furthermore, many economists believe that the increase of excess monetary and government irresponsibility led to the overall crisis in the mid to late 2000’s. Some economists believe that the oversupply of monetary contributed to the 2008 crisis due to low interest rate targets that were substantially below the monetary requirement. In this paper I will discuss the effects of the changes in monetary and fiscal policies that altered the economy in 2008 as well as the current and desired gross domestic product for the future United States economy.

Globalization brought upon many changes to the American Automotive Industry in 1975. Increasing demand for import automobiles and the Energy Policy and Conservation Act served to be a real threat to the Ford Motor Company, American Motors, Chrysler Corporation, and General Motors. Out of these four manufacturers Chrysler was affected the worst by the industrial change, as they required a federal aid and required brand /management changes to revive themselves. Globalization formed a more competitive market in the United States during the 1970’s due to the changing emissions standards. The American Automotive Industry had to adjust to the new emissions standards from the Clean Air Act of 1970, and the fuel economy requirements of the Energy Policy and Conservation Act, all while building cars that attracted to American consumers.

Did you know that by the end of the year 2009 the unemployment rate had increased from its average 5% to an astounding 10%? This is because 15.3 million people became unemployed as a result of the economic recession. No shocker, but poverty rate had also increased from 13.2% in 2008 to 14.3% in 2009. This meant that the number of people living in poverty in the United States had increased from 39.8 million to 43.6 million. This great increase had all happened in the span of 1 year. Something that should have taken over 10 years only took 1 year and this is all because of the Great US recession. Also the US suicide rate had reached its highest record since 25 years between the years 2008-09.

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.

The great recession of 2008 affected everyone around the world. The great Recession is considered the second worst economic crisis in American history, behind the Great Depression.

Founded in 1908, General Motors has been one of the largest corporation and the second largest automaker in the world coming after Toyota. For 77 consecutive years from 1931 to 1908, GM has been a leading automaker and marketer as ranked by the total number of units sold yearly. General motors have also been a leading employer not only in the United States but also in other parts of the world where it operates. However, the company has been seriously affected by the current economic crisis. The Detroit Three, led by General Motors have been a backbone of the United States economy and there eminent collapse in the current economy crisis is likely to have negative impacts on the United State’s

Intro: Studying Economics in the backdrop of the Great Recession emphasised the power that Economics leverages upon global society. My lack of understanding of the Economic mechanisms behind the recession led me to read Krugman's "End This Depression Now", and attend the Cambridge University Marshall Society Conference, “The Power of Policy”. The most engaging debate was that between Madsen Pirie of the Adam Smith Institute, and Lord Skidelsky. Both these sources introduced me to alternative perspectives regarding the causes and effects of the recession; however, what I found most interesting was witnessing the polarizing beliefs of the most efficient way to respond to the UK’s recession, both from highly respected academics. In Krugman’s opinion

Yes. Recession occurs when gross domestic product growth is negative for two consequence quarters and this negative gross domestic product growth arose from the financial crisis. The financial crisis 2007-2008 happened because of banks produce plenty of money by making loans. As they making loan, they created new money and doubled it in seven years. This leads to debt in economy also doubled.

Over the years, the U. S. auto industry's market has been experiencing fluctuations due to many reasons including: price, quality and foreign competition. General Motors Corporation (GM) which had been the leading car and truck manufacturer had been experiencing declining market share and facing stiff competition from both U.S manufacturers and foreign imports such as the Asian auto producers that included Toyota, Honda and Nissan. The main reason for increased foreign competition was that foreign cars were more fuel efficient, smaller, less expensive, and often more reliable than their American counterparts.

The financial crisis starting in 2008 and the following recession hit hard the US auto sector. Traditional car makers had to realise that substantial changes were needed in order to maintain their strong position in the