The Recession Of The United States

The Great Recession was the general economic decline observed in world markets around the end of the first decade of the 21st century. The Great Depression was a severe worldwide economic depression in the 1930s.

During the early 2000 's, the United States housing market experienced growth at an unprecedented rate, leading to historical highs in home ownership. This surge in home buying was the result of multiple illusory financial circumstances which reduced the apparent risk of both lending and receiving loans. However, in 2007, when the upward trend in home values could no longer continue and began to reverse itself, homeowners found themselves owing more than the value of their properties, a trend which lent itself to increased defaults and foreclosures, further reducing the value of homes in a vicious, self-perpetuating cycle. The 2008 crash of the near-$7-billion housing industry dragged down the entire U.S. economy, and by extension, the global economy, with it, therefore having a large part in triggering the global recession of 2008-2012.

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 housing crisis of the late 2000s rocked the economy and changed the landscape of the real estate business for years to come. Decades of people purchasing houses unfordable houses and properties with lenient loans policies led to a collective housing bubble. When the banking system faltered and the economy wilted, interest rates were raised, mortgages increased, and people lost their jobs amidst the chaos. This all culminated in tens of thousands of American losing their houses to foreclosures and short sales, as they could no longer afford the mortgage payments on their homes. The United States entered a recession and homeownership no longer appeared to be a feasible goal as many questioned whether the country could continue to support a middle-class. Former home owners became renters and in some cases homeless as the American Dream was delayed with no foreseeable return. While the future of the economy looked bleak, conditions gradually improved. American citizens regained their jobs, the United States government bailed out the banking industry, and regulations were put in place to deter such events as the mortgage crash from ever taking place again. The path to homeowner ship has been forever altered, as loans in general are now more difficult to acquire and can be accompanied by a substantial down payment.

We now know to pay attention to the red flags. We collectively shrugged off signs and signals in the years leading to 2008. The disaster was foreseeable. The extreme increase in subprime lending, the seemingly infinite increase in housing prices, and the increase in national household mortgage debt should have been alarm enough. These passed by either unnoticed, or ignored. Because of our ignorance, we were not prepared to handle the inevitable crisis.

In 2007-2008 the US went into a recession, a financial crisis that has since then taken five years to rebuild. During that time millions of Americans were unemployed and faced many economic struggles which negatively impacted the real estate market causing a multitude of foreclosures. The reason for this recession was because there was no authority over banks and they were not being monitored properly. Banks were able to gamble with the finances of millions of people with no consequences towards their actions. The Dodd Frank Act Wall Street Reform and Consumer Protection Act of 2010 was put into place to make sure that nothing like this ever happened again; The Dodd Frank Act implemented and set laws into place to make sure that banks and financial

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.

Several years ago the economy in the United States took a real turn for the worst. It was one of the biggest economical down falls in history. Many people lost their homes toforeclosure when they became unable to make their mortgage payments. There are many reasons that people suddenly became unable to make their payments. As the unemployment rate increased from 5% in December of 2007 to 10.01% in October of 2009 (Bureau of Labor Statistics) many people lost their jobs. Another cause was that people had entered into bad loans with interest only or ballooning payment loans these types of loans were very common lending practice. Then when the housing market crashed people found themselves upside down in their loans, meaning that they now owed two or three times the value of their home. These are among some of the reasons people lost their homes. Now that the economy is starting to turn around and the federal government has kept the interest rates low.Is there any hope for all these people that have lost their homes to recover and own a home again?

Similarly, the Great Recession was due to consumer spending cutbacks and a drop in demand for the establishment of new housing. In the two decades previous to 2008, the American growth rate was very high. Their household needs also became very high, which made demand increase. Spending was at a high. However personal income was decreased. The consumers then had to borrow money from the banks. This gave the consumers debt. So, when the house prices rose, banks stopped loaning money to people and the people decreased their spending. This happened because the people were not able to pay the banks back. People also cut back on buying or making new houses, so household demand dropped. Many say that this decrease caused the Great Recession. Housing was one of the main subjects that many believe, caused the Great Recession. “Subprime” mortgage availability and low interest

The recession of 2007-2009 played a great roll in how many companies in the United

As the U.S. economy continues its struggle to climb out of a deep recession, personal loans remain very difficult to secure. Having shouldered much of the blame for the financial hardships that have befallen consumers across the nation, many banks now require potential borrowers to meet strict criteria for an approval. With the financial institutions being more selective about who they assist, Detroit locals like Ashley Wright are learning that consumers with excellent credit and decent paying jobs are the most likely to make the cut. "Getting an approval was definitely a journey," said Wright, who was in search of a personal loan to help out with school and living expenses. Wright found that a private bank was the best place to turn for

Anyone that was living in America, or even watching from abroad, knows that in 2008 America had a huge collapse of the housing market. Homes were foreclosed on in record numbers causing the real estate balloon to burst. But the collapse did not happen overnight and in many ways was destined to happen. According to Investopedia.com in order to attract buyers and sell houses, mortgages were offered to less than qualified applicants. Then just a few years before the collapse subprime mortgages made up 20% of the market. (Investopedia.com) Factors such as the 1993 passage of the North American Free Trade Agreement (NAFTA) and the 9-11 terrorist attacks led to an increase in unemployment. With unemployment numbers climbing many homeowners

In order to finance purchases by consumers there must be credit loans. In the 1920s there was no thing as the FDIC which guaranteed money in the bank. Banks in the 1920s were so eager to give out loans that that loaned more money than what they had on reserved. In 1929, it created “bank runs” and mass sell offs, “$16 million shares” (wiki) in one day. History repeated itself In the 2000s. As fast a people were getting mortgages they were approving to unworthy people. There were “trillions of dollars of mortgages” written, which “started a wave of delinquencies and defaults” (FBTB). Qualifications were liberal, people were able to borrow with little money down. On top of that in the mid- 2000s home prices started to decline which had before been rising “57% over five years” (HGU). The, bubble bursted, This fast rise in prices led to a halt in home sales “double digit into low single digit to negative digit” (HGU). The lack of home sales and trillions of dollars in mortgages did not just cripple the housing market. It affected people with loans such as student and mortgages could no longer pay the minimal

Before jumping straight into the causes of the 2008 recession, first you must be informed of the history in previous recessions America has had to face. Since the Great Depression ended in mid 1930’s, America has had to overcome around eleven recessions. Now some might argue that not all recorded recessions were worthy of getting the tittle as an official recession. Many will simply say it was slight hiccup in the economy because of the short six to eight-month duration of the smaller recessions. When divided over the years It seems that the United States has one to two recessions every decade. However, everyone of the short recessions had a significant impact on the American

Raging wars, political disputes, and economic recession are several of the many things that has been troubling the people of the world since 1939. Ever since from then, countless lives had to be spare for the life we own today. Nonetheless, migration of these people was inevitable; they needed to look for a place to stay, to be safe, and to be able to survive for their children’s sake and for themselves. In recent 20 years back, the approach of handling these ‘aliens’ has been acceptable but in some cases unforgivable due to globalization. The technology growth and the advancement of communication options has made traveling a more pleasant thing rather than an obstacle. Some were probably believe that they would have a better chance in other places as their own does not show a promising future for them to survive. Nevertheless, although efforts were made, there are still some that does not abide to the motion; to provide help to those who are in need; they choose to become preserved -- prompting the question, why? Helping people is a nature that we human have carried for many generations; it’s a fact but, can we provide the proper necessity to actually be a help towards them? Who is to blame here? Should all the countries join forces to help the migrants and refugees, regardless of their origin? The answers are discussed over two different articles of different source. In the article, “Scandinavians Split over Syrian Influx,” Hugh Eakin asserts attention that helping