The United States Economy: The Slow Recovery of a Nation

During 1997-2006, house prices rose 85 percent. This led to an irresponsible consumer spending spree. Millions of people bought a house that they could not afford. Government regulatory agencies and mortgage lenders became less strict with credit restrictions so that people could buy homes without making any down payment. In 2007, however, the home values and sales began to decline. Due to the loss of trillions of dollars in home value, a record number of borrowers defaulted on their mortgage payments. America was put into a recession in 2008 because of the contraction of corporate spending and consumer purchased. The prices of consumer goods spiked, while employment declined. On October 3, 2008, former President Bush signed the Troubled Asset Relief Program; however, the bill did not restore the economy as a whole. By June 2009, America's economic recovery was at its weakest since the end of the Second World War. I chose this event in history because it had a major effect on America’s economy and changed the course of history. Historians need to study the Great Recession because America should learn from their mistakes. The Great Recession was due to different factors; however, if the regulations on credit restrictions were not tampered with, then the severity of the recession could have been

A nation’s economy plays a vital role in how a nation operates. The United States economy faces a large variety of problems in this paper; we will focus on 4 major economic problems, unemployment, inequality, federal debt, and the financial/credit market. All four issues are interconnected in some way with deep social and economic implications. These issues were emphasized during the Great Recession that hit the U.S. economy in 2007.In the following paper, we will look at each of the four topics individually as well as look at how each plays a significant role in one another’s overall impact on the U.S. economy as well as individuals in the United States. The United States plays a crucial role in the world economy, meaning that every issue and difficulty faced the United States economy has implications far outside the U.S., understanding how these issues relate to one another sheds insight into just how connected every area of the economy actually is.

The recession of 2008 is also called the ‘Great Recession’, said to have begun in December 2007, and took a turn for the worse in September 2008, and it was a severe economic problem expanded globally. This recession affected the world economy, and is said to have been the worst financial disaster since the Great Depression. The decline in the Dow Jones this time was -53.8%. Since the official start of the recession in December 2007, and through June 2010 there have been about 2.3 million homes foreclosed in the United States. In 2012, the state with the most foreclosures in January alone was California, with 51,584 houses being repossessed. Unemployment during this collapse was 8.5%, and continued to increase to about 10% as of 2010. People’s reaction to this recession was a huge decrease in spending and borrowing from banks, but an increase in saving.

The United States economy is racing ahead at dangerous speeds, and it may be too late to prevent the return of widespread inflation. Ideally the economy should move ahead gradually and grow at a steady manageable rate. Mae West once stated “Too much of a good thing can be wonderful” and it seems the U.S. Treasury Secretary agrees. The Secretary announced that due to our increasing surplus and booming economy, instead of having an outsized tax cut, we should use the surplus to further pay down the national debt. A tax cut, though most Americans would favor it initially, would prove counter productive. Cutting taxes would over stimulate an already raging economy, and enhance the possibilities of an

The news mediums, television, radio, print, or social media give information 24-hours a day regarding the economy. Individuals are not so sure about the reports issued on almost an hourly basis that are stating the economy of United States is improving. Many Americans are still without jobs, and do not believe their income can continue to support their families. The cost of purchasing a home is going up in many areas across the country, which is good for the market, but can be bad for the first time homebuyer. Unemployment, expectations, consumer income, interest rates are economic factors that influence individuals behavior and the United States fiscal policy.

Because of this high interest rate, the householder cannot afford the house, most of people start selling their house, the housing market start collapse. In 2008 and 2009, the US. Labor market loss 8.4 million jobs, or 6.1% of all payroll employment. This was the most dramatic employment contraction of any recession since the Great Depression. For the worker during the Great Recession, loss their job means that family incomes have dropped, adults as well as children have lost health

     The United States economy is slowly creeping towards a recession. The stock market has shown repeated drops. Consumers are not purchasing and even savings and loans are down for fear of a huge economic crash. The only bright spot is a housing market that refuses to yield as apparently consumers are still positive enough to purchase houses.

With the worsening economy on the forefront of most people’s minds, it is quite obvious that the strategy for turning this depression around needs to be changed. The effort and massive amount of money that has been used in attempt to stimulate the market has resulted in only temporary fixes. To cure the actual problem rather than treat just the symptoms, an out-of-the-box solution is clearly required.

Overall the U.S economy faced challenges due to budget cuts, taxes, and spending cuts. Policy changes marked sluggish growth followed by a strong finish in 2014 therefore 2015 should have a stronger economic outcome.

In December of 2007 the Great Recession hit not only the american but the world’s economy. According to the U.S. National Bureau of Economic Research (NBER) the struggle didn’t end in the United States until June 2009, and therefore had a duration of about 18 months. This global crisis “ranks fourth in terms of the weighted sum of countries suffering it” (NBER). Consumers, who had been the engine of the economy for the past several decades, suffered the loss of their jobs. Between 2008 and 2009, “the U.S. labor market lost 8.4 million jobs, or 6.1% of all payroll employment” (State of Working America). This resulted in “the most sever consumer spending decline since World War II” and the worst employment contraction since the Great Depression, reaching a peak of 10% of all the workforce on October 2009 (BLS). The economy was already faltering in the banking sector, but it finally crashed with the dearth of credit. As a heart distributes the blood throughout the human body, even reaching the limbs, allowing the body to work properly, the banking sector “pumps” credit, reaching every business in every sector. When the banking sector stops giving credit, the whole economy freezes since businesses don’t have means to pay their bills. There are reasons why the banks stopped the flow of credit, and they could have been avoided if the government had corrected the bad manners to which the banking sector was getting used, all driven by the ambition to generate more revenue. The

Real economic growth is defined as, “the rate at which a nation 's Gross Domestic product changes or grows from one year to another.” (“Real Economic Growth Rate”). In the U.S, GDP growth rate is currently 1.6%, compared to 1965, when it was 6.5% (Amadeo). Total Factory Productivity, or development of business processes and technological growth, is another measure of economic growth. The average TFP from 1891-1972 was 2.33, where the average TFP today is 1.33 (Matthews). It is apparent that the U.S. economy is not growing the way it once did. There are many reasons it is not doing well, and cannot grow how it used to. These include decreased productivity in the workforce, no new technology, limits on

The financial crisis that began in August 2007 has been the most severe of the post-World War II era and, possibly--once one takes into account the global scope of the crisis, its broad effects on a range of markets and institutions, and the number of systemically critical financial institutions that failed or came close to failure--the worst in modern history. Although forceful responses by policymakers around the world avoided an utter collapse of the global financial system in the fall of 2008, the crisis was nevertheless sufficiently intense to spark a deep global recession from which we are only now beginning to recover. Figure 1 shows the Recession periods in United States

The 2008 so called “Great Recession” was a time that was tough on a great deal of americans as well as people all around of the world. The shock was the popping of the housing bubble. After the great burst, the financial situation of the country began to spiral out of control. Unemployment skyrocketed. Millions of Americans were laid off. The inflation rate plummeted to an extremely unhealthy amount. This was strange because the United States had recently spent decades working to lower inflation rate. They finally received what they wanted and much more. The consumer price index also eventually crashed as well. A big reason for these crashes were civilian reactions to the bursted housing bubbles. The United States took several actions to recover from the crisis. They worked at lowering mortgage interest rates and also passed the American Recovery and Reinvestment Act. They also bailed out huge failing banks like AIG. We took many actions that eventually paid off and pulled us out of the recession.

The lack of response to low mortgage rates shows that no one industry or market will be able to stimulate economic growth, other industries and markets must join in. The labor market has taken initiative and has made changes, such as adding jobs to the economy in order to lower the unemployment rate. When the United States economy first went into its recession in the years 2008 and 2009, 7.4 million jobs were lost. Since then, there have been over 7.2 million jobs created, which is a 97 percent recovery of “employed persons” in the economy; furthermore, unemployment is at a five year low, sitting at 6.7 percent (Green). These changes in the labor market are crucial for success. Increasing employment throughout the United States, will increase household incomes dramatically. With this increase in household income, comes confidence which will guide consumers to spend the money they make in the economy, instead of saving it. During recessions, there is a sudden increase in savings which stop the flow of money in the economy. However, now the saving rate, the amount of income not spent but set aside, has continued to drop. In December 2013, the saving rate was 3.9 percent, a large decrease from 4.3 percent in November of that same year. The average rate for the entire year was 4.5 percent, the lowest saving

It has almost been a decade since the financially crisis of 2008 sent the United States and global economy on the edge of collapse. Even though the global economy didn’t collapse millions of people still lost their job, saving accounts, and homes. People all over the country were financially ruined and many will never be able to reacquire their lost money. After the dust had settled from the housing crises in 2008 the United States was able to rebound and strengthened its economy.