The Recession Of The United States

What are the main arguments and the reasons and rationalizations that need to be addressed?

Too many Americans have fallen victim to the crisis that has become the norm for our citizens these days. Lenders no longer want to work with individuals who have gone through the foreclosure process and for many it is not only their homes they lose. Some have lost their jobs and/or families, others fall into a deep depression and worst of all some have taken their own lives.

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.

The foreclosure crisis that took over the United States a few years ago left many people facing economic hardships. This crisis happened because there was a huge housing bubble that was unsupported by actual home values. The bubble began bursting in spring of 2008 and the crisis culminated in mid-2009. Many lenders went out of business and many home owners began losing their homes. When the government became aware of this problem and began to implement new programs, it was already too late for many homeowners. Those homeowners are not at a point where they might be considering buying a new home. The housing crisis has created new rules, regulations governing the mortgage industry, and has also created a new agency dedicated to consumer protection. This consumer protection agency is called the Consumer Finance Protection Bureau. These dramatic changes have helped to create more responsible lending. The improving market conditions such as low housing costs and competitive interest rates are allowing those affected by a foreclosure to become homeowners again. Prospective buyers have a multitude of programs available to them, so even those with less than clean slate have several options.

The economic crisis that hit the country took many jobs or people had their hours cut. With this situation happening, many people were finding themselves short on their mortgage payments and needing to go into foreclosure or having a short sale on their homes. Either option the homeowner chose or had chosen for them, they found themselves with poor credit and no way to become homeowners again. However, most wait times before was a minimum of two years up to seven years before that previous owner could be eligible for traditional loans.

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.

The United States is a country that over the years has relied on its economic stability to continue providing acceptable living for its citizens and continue its leadership of the free world. This country went through an economic depression which lasted several years throughout the 1920’s and the 1940’s but successfully recovered from it after World War II. An economic boom in the 1990’s during George Clinton’s Presidency the federal budget was managed to be balanced and helped increase the economic crisis of the United States. The recovery did not last long as the United Stated went through a huge recession during George Bush’s Presidency in what many experts called the “Great Recession” which affected many especially businesses and middle class citizens. Although today many consider the recession to be over the effects of it can still be felt today specially by many middle class families like my own. I come from a small family of three which includes my parents and me. My family comes from minimum wage salaries and have been part of same line of work for many years however, the amount of necessities the family can afford has definitely changed. For example, the amount of groceries you can buy nowadays with a $20 bill is much less than those of the 1990‘s. The price of gas has certainly gone up which has caused many companies to outsource jobs or close down. My dad was laid off his dream job due to budgets cuts while my mom’s working hours have been reduced. As a result my

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.

without a home and in financial straits in the aftermath of the 2010 Foreclosure Crisis. However,

The single greatest problem facing America today would be the threat of a Recession in the stock market. Because if America goes in to Recession again the stock market will crash again. Then we would not need to worry about this stupid war because we will be broke.

The Great Recession inflicted abundant harm in the U.S. and global economy; 8.7 million jobs vanished (Center on Budget), 9.3 million Americans lost their homes (Kusisto), and the U.S. GDP fell below what the economy was capable to produce (Center on Budget). The financial crisis was unforeseen by millions and few predicted that the market would enter a recession. Due to the impact that the recession had, several studies have been conducted in order to determine what caused the recession and if it could have been prevented. Government intervention played a key role in the crisis by providing the bailout money that saved those “Too Big to Fail” institutions. Due to the amount of money invested in the bailout and the damage that the financial crisis had on the U.S. population, “Too Big to Fail Banks”, and financial regulation are two of the biggest focuses of the presidential candidates. Politicians might assure voters that change will occur, but is it to late for change to be efficient, are the financial institutions making the same mistakes that led to the financial crisis?

When the Stock Market crashed in the late 2000s, millions were forced to leave their homes by means of foreclosure. Now, after many hardships, the economy is on the rise; and the housing market is making a comeback. Its previous victims are beginning to recover and start fresh in this young economy. The low interest rates and surplus of homes have made the once expensive houses more affordable to those who are seeking to restart. Although these “boomerang buyers” are able to afford these homes, their past record of foreclosure has hurt their credit score which makes it difficult to acquire loans in this cautious market. However, there are several steps such people can take and many methods they can

The foreclosure/housing market crash several years ago affected a vast amount of families across the country. Unfortunately, my family was also affected. Thankfully, my parents have not gone through foreclosure yet, but we are all stuck in a house because we are “underwater” (owe more than it is worth). This crisis directly and indirectly affected so many, but thankfully we are all starting to bounce back.

Banks now offer programs to help homeowners/homebuyers, but many times, these loans are often hard to obtain. The current programs have more stringent requirements that are unreasonable for distressed homeowners. In my opinion, the only way to rectify the foreclosure issue is to make a substantial change in how potential homebuyers and homeowners obtain loans.

Establish Credibility: According to US News, the great American dream of owning a home appears poised for a comeback. Real estate company Trulia reports that in many parts of the country, rents are rising while housing prices are falling, making buying a home more affordable. Trulia found that in 98 out of 100 major metropolitan areas, including Detroit, Atlanta, and Cleveland, buying has become more affordable than renting.” I think the mortgage catastrophe of 2001 left prospective home buyers afraid of buying a house without being extremely certain that is the right decision.