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what caused 2008 recession
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An economic recession is described as “a widespread decline in the GDP and employment and trade lasting from six months to a year.” (Word Net) The economic recession is an international problem that has been affecting countries like the United States, China, United Kingdom and others for over two years. The latest recession began when house prices and sales began to fall and large drop offs in business investments started. Another causing factor of the recession was citizens with bad credit buying houses and real-estate and mortgages not being paid. Countries began taking action in 2008 by implementing stimulus packages and bailout plans, which can help a country locally, federally and on a global scale. The United States stimulus package has been in effect for over a year and they have been distributing bailout money to large corporations, investing in infrastructure and public services as well as investing into green incentives. The States were one of the first countries to begin a stimulus package in 2008 under the Bush administration.
In 2008, the United States began too feel the harsh effects of the economic recession. Large auto companies and banks were suffering and were on the brink of bankruptcy. Bailout money was sent to hundreds of large companies, generally automotive companies and banks. Approximately $70 billion was given to the bank AIG and nearly $50 billion was given to General Motors (Pro Publica). The reason for these bailouts were so the years worth of investments from American citizens could be kept safe and the jobs of a few million citizens could be kept safe. This bailout money would stimulate and keep these corporations running for an appropriate timeframe that they could rethink their plans ...
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...blem, like Canada or the UK, follow similar plans, there can be a greener, more prosperous and safer future for a large portion of the globe.
Works Cited
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"WordNet Search 3.0." Word Net. Princeton University, Web. 11 Jan 2010. .
Rattner, Steven. "Delusions About the Detroit Bailout." The New York Times 23 Feb. 2012: n. pag. Print.
Teslik, Lee. "Backgrounder: The U.S. Economic Stimulus Plan." The New York Times, January 27, 2009.
Wayne Swan 2009, ‘Budget Speech 2009-10’, Australian Government. Retrieved May 20th, 2010, from - http://www.ato.gov.au/budget/2009-10/content/speech/html/speech.htm
Every few years, countries experience an economic decline which is commonly referred to as a recession. In recent years the U.S. has been faced with overcoming the most devastating global economic hardships since the Great Depression. This period “a period of declining GDP, accompanied by lower real income and higher unemployment” has been referred to as the Great Recession (McConnell, 2012 p.G-30). This paper will cover the issues which led to the recession, discuss the strategies taken by the Government and Federal Reserve to alleviate the crisis, and look at the future outlook of the U.S. economy. By examining the nation’s economic struggles during this time period (2007-2009), it will conclude that the current macroeconomic situation deals with unemployment, which is a direct result of the recession.
Between January 2008 and February 2010, employment fell by 8.8 million, the largest decline in American history. The 2008 Recession, which officially lasted from December 2007 to June 2009, began with the bursting of an 8 trillion dollar housing bubble. Job losses during the recession meant that family incomes dropped, poverty rose, and people all over the country were suffering. Things like this don’t just happen. Policy changes incorporated with the economy are often a major factor. In this case, all roads lead to one major problem: Deregulation. Deregulation originating from the Carter and Regan Administrations, combined with a decrease in consumer spending, and the subprime mortgage bubble all led up to the major recession of 2008.
Government Track (2008). Economic Stimulus Act of 2008. Budget Report. Retrieved June30, 2010, from http://www.govtrack.us/congress/billreport.xpd?bill=h110-5140&type=cbo
Angell, Marcia. "ObamaCare Confronts a Fiscal Crisis: Why the Affordable Care Act Doesn’t Add Up." New Labor Forum (Sage Publications Inc.) 22.1 (2013): 44-6. Print.
Chenn, Menzie. “The Allocation of Stimulus Funds.” Econbrowser. Econbrowser. 20 April 2009. Web. 4 May 2011.
Zhang, Jane. “Uninsured Spend $30 Billion, Study Says.” The Wall Street Journal 25 August 2008. 16 October 2008 .
Dan Carney, " Social Policy " Congressional Quarterly Weekly Report, 9/7/96, Vol. 54 Issue 36, p250
Bailouts have been tried in the auto industry, and they don’t work. In 2009, Democratic leaders in Congress created a plan to provide over $25 billion to Detroit, along with the $25 billion in loans the government had already committed to help the same auto industries make more fuel-efficient cars. In my opinion, the problem wasn’t the industry, the problem was the companies. The real problem for General Motors, Ford, and Chrysler is that their management didn’t work, and they can’t make cars of high enough quality to attract American buyers. Giving money to the same people who couldn’t get it right in the first place wouldn't solve any of that. The government bailout allowed GM, Ford and Chrysler to avoid necessary cost cutting which should
...cording to Mishkin’s Paper “The Financial Crisis and the Federal Reserve”, the bail-out amount is 700 billion.)
...to saving energy that would help and reduce global warming, what is more is that it would also help people reduce their heating and electricity bills, decreasing the taxes and making people more aware of how they should insulate their homes and buildings, for them to come out with the best result for the environmental problems faced today, and for them too save money.
To learn more about bailouts such as this one, be sure to read our related article, Top 6 U.S. Government Financial Bailouts.
In the late 2000s, the World suffered from a big global economic crisis which caused “the largest and sharpest drop in global economic activity of the modern era”, in which “most major developed economies find themselves in a deep recession”, according to McKibbin and Stoeckel (1). Because its consequences have a very big impact to the whole world, many economists and scientist have tried to find the causes of the crisis; and some major causes have been emphasized are greed, the defection of the free market system, and the lack of prudent regulation and supervision. This essay will focus on the global imbalances, one of the most important causes of the current economic crisis.