This website uses cookies to ensure you have the best experience. Learn more

Fiscal And Monetary Policy Before During And After The “Great Recession” Of 2008

874 words - 4 pages

One of the most interesting facets of The Great Recession of 2008 is that it didn’t really begin in 2008. The fiscal and monetary policy that prompted what we know now as the Great Recession of 2008 really began in 2006 and 2007. What was happening then and why did it take so long for the nation to feel the recession? The answers to those questions explain a great deal about how the Federal Reserve Bank operates and how the different ideologies of economics affect our nation (Sumner, 2011).
In 2006 the largest housing bubble we have seen in the past 50 years burst and in December 2007 the recession began. The recession would last for roughly 18 months, officially. However, some economists ...view middle of the document...

Just when we thought things could not get any bi-partisan politics moved the nation toward economic austerity at the wrong moment which very likely led to the duration of the great recession (Thoma, 2013).
Had the Fed kept to one school of thought instead of vacillating between predictions of doom and gloom and then back again to all is well our nation might have bounced back more quickly from the burst bubble and the recession (Lowrey, 2014). It is this vacillation and “wait and see” attitude that clouds many economists’ thinking. Most of the time making small adjustments to the market and waiting it out is okay, but when things start to fall apart some vision is needed to spur the Fed into action and prevent another crisis. According to Mark Thoma at The Fiscal Times:
Fiscal policymakers in Congress deserve more blame and scorn than they have received for their poor response to the recession. Congress failed to implement a fiscal stabilization package that was large enough to address the big problems the economy was facing … the initial package was too small in both size and duration (Thoma, 2013)
The empirical evidence is there and now there is no excuse for our nation to ever suffer a great recession or great depression again. So what can our nation do to prevent or avoid another economic disaster? There are six things the Fed can do to prevent another recession:
1. Cut interest rates: Cutting interest rates help to boost aggregate demand
2. Preventing home repossessions: Freezing mortgage rates could help prevent foreclosures
3. Expansionary Fiscal Policy: Tax cuts and higher...

Find Another Essay On Fiscal and Monetary Policy Before During and After the “Great Recession” of 2008

Fiscal and Monetary Policy Essay

1128 words - 5 pages AND FISCAL DEFICIT part one is categorical that in order to raise the economy and GDP levels the president and federal government will have to apply both monetary and fiscal policy that are complement of each other. A fall in the FED rate increased government spending, improved welfare spending, a drop in both FED and tax rate all works together to overturn balance between government spending and its revenues from taxes . This tool is a prototype

Fiscal and Monetary Policy Essay

798 words - 4 pages equipment necessary to run those applications. This action alone is reported to have reduced operating costs by $27 million over five years. Furthermore, websites such as USASpending.gov have been created, enabling taxpayers to review spending obligations by Federal agencies (Cutting). The Board of Governors of the Federal Reserve established its monetary policy of keeping interest rates at or near zero percent after the financial crisis

The FED's Expansionary and Contractionary Monetary Policies During and After the Economic Recession

595 words - 2 pages During these hard times, people are facing one of toughest job markets in our nation’s history. Even though the media says economic recovery is imminent, many are still wondering when they will see the light at the end of the tunnel. The Federal Reserve Bank or FED is already being asked to prepare an “exit strategy” due to the concern that the expansionary monetary policy they used will quickly turn the recession into high inflation. This “exit

Fiscal and Monetary Policy and Economic Fluctuations

990 words - 4 pages The global economy was relatively doing fine more than five years ago before it was hit by economic downturn or recession. During this period, the American economy was at its peak, particularly in the fourth quarter of 2007. However, this was followed by a mild recession at the beginning of 2008, which eventually turned into a severe credit crisis across the world approximately one year later. While only a few countries escaped the

The Colonization of New Zealand: Before, During, and After

1053 words - 4 pages , looking back at history, it is noticeable that the British affected the natives negatively and positively, and has also left a trademark on the culture today that can be found in New Zealand. Before the arrival of the Polynesians around 950-1130 A.D., New Zealand was unknown of to mankind. The Great Fleet, a mass arrival of Polynesians, arrived in 1350. From these ancestral people came the tribes of Maori and Marori. These two tribes were quite

In the Wake of the Great Recession: Long-Term Effects of Fiscal Policy

2183 words - 9 pages evaluate the economic stimulus efforts used by the U.S. government in response to recessions, the Great Recession included. Fiscal policy measures can have impacts on economic growth and government spending. Additionally, implications have been noted when fiscal policy is utilized as part of expansionary policy. Economic growth can be affected by changes in various taxes, such as corporate income taxes and personal taxes. Changes in corporate

Fiscal Policy, Monetary Policy, and a Healthy Gross Domestic Product

1773 words - 7 pages appropriate monetary policy and in the absence of further shocks to the economy. Monetary policy can have an important impact on aggregate demand and ultimately on the GDP. Projections show that the deficit for fiscal year 2011 will be close to $1.4 trillion, or roughly 9 percent of GDP, a level comparable to deficits recorded in 2009 and 2010 but sharply higher than the deficits recorded prior to the onset of the current recession and the

British Fiscal And Commercial Policy In The Colonies After 1763

780 words - 3 pages Discuss British fiscal and commercial policy in the colonies after 1763 and assess its significance. After its war with France, Britain decided to levy taxes on the American Colonies in order to pay off its war debts. Many taxes were imposed on the American colonies to raise revenue for the crown. Starting in 1763, British fiscal and commercial policies imposed a series of tariffs known as the Sugar, Stamp, and Townshend Acts, which

The Onset of the Great Recession in 2008

1872 words - 8 pages The onset of the Great Recession in 2008 ushered in an era of fiscal and economic crises worldwide. As the world’s economy suffered, so did its smaller subunits—including cities. In a time of economic hardship, city residents—virtually the sole financers of cities—move from the expensive downtown areas into more affordable suburbs, taking their property taxes with them. When coupled with raised taxes in order to supply the city budget, such a

The Dalai Lama, Before, During And After The Chinese Invasion

1373 words - 5 pages The universally recognized 14th Dalai Lama has tirelessly fought for the freedom for Tibet, during and after the unlawful occupation of the Chinese. His non-violence and political involvement for Tibet had brought acknowledgment and respect from the rest of the world. Tenzin Gyatso, the 14th Dalai Lama, was born in 1934 in Eastern Tibet. He was hailed his predecessor's incarnation at the age of two, and was enthroned in 1940. Traditionally

Death Before, During, and After War

1562 words - 6 pages it was an unseen enemy portrayed in her figures faces and body expressions. Her view on society and her duty as a mother was entangle with death. Though the topic is morbid her artwork is something to be admired and praised. As the old saying goes beauty is in the eye of the beholder and though death is shown in Kollwitz’s artwork it is somehow beautifully sad. Before talking about her artwork it is best to know where Kollwitz’s fascination

Similar Essays

Monetary And Fiscal Policy And The Great Recession

801 words - 4 pages The goal of monetary and fiscal policy is to create and maintain a growing stable economy. While both policies deal with manipulating the economy, which entity uses them and the tools they use are what differentiate them from each other. When it comes to monetary and fiscal policy, the details and timing matter because they can save a country, or they can destroy a country. Monetary policy is about controlling the supply of money in attempts

The Great Recession Fiscal Policy: Analyzing Problems And Solutions

1879 words - 8 pages noted, recommendations for resolution will be included. The objective of this paper is to consider relevant problems that might require further consideration in a research project about the long-term after effects of fiscal policy implemented by the U.S. government in response to the Great Recession. The new millennium brought with it a housing boom which had reached an unsustainable level (Pollock, 2011). Housing prices grew rapidly, and

Fiscal And Monetary Policy Essay

1223 words - 5 pages economic growth. In times of recession, one of the advantages of monetary policy comes in the form of the discount loans. “…discount loans have the advantage that they allow the central bank to become the lender of last resort during financial crisis.” (Manish) However, these bail-outs are only so effective, as the value of money decreases and inflation increases. According to Victoria Duff, “When prices on goods and services start to rise as the

Monetary And Fiscal Policy Essay

1413 words - 6 pages Monetary and fiscal policy and their applications to the third world countries with a huge informal sector This essay seeks to explain what are monetary and fiscal policy and their roles and contribution to the economy. This includes the role of the government in regulating the economical performance of a country. It also explains the different features and tools of monetary and fiscal policy and their performance when applied to the third