The Worst Recession Of The United States

1420 WordsNov 24, 20146 Pages
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. While there are several speculated causes to the recession of 2007, one cause that stands out is the housing bubble burst. "As the housing bubble burst and trillions of dollars ' worth of toxic mortgages began to go bad in 2007, fear spread through the massive firms that form the heart of Wall Street ("Meltdown")". The first repercussions of the housing bubble bursting were the floating rumors about the investment bank, Bear Stearns. The rumors of the bank 's imminent bankruptcy were so abundant, that they became a self fulfilling prophecy ("Meltdown"). In an attempt to save the bank, Federal Reserve Chairman Ben Bernanke created a deal with JPMorgan ("Meltdown"). This deal stated that "the federal government would use $30 billion to cover Bear Stearns ' questionable assets tied to toxic mortgages
Open Document