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Recession Or Depression Essay

4118 words - 16 pages

An entire planet in a veritable state of panic. A worldwide economic crisis that affects almost every human being on the planet. A stock market that fluctuates, oscillates, and takes another nosedive every time we turn on the nightly news. Major corporations, the foundations of Americas economic strength in the world for decades have begun to falter, some have even fallen entirely. AIG, General Motors, Chrysler, Home Depot, Caterpillar, Merrill Lynch, Fannie Mae, Freddie Mac, corporations considered too large and too networked within the web of the world economy to ever fail, have. Credit has been virtually frozen by banks and lenders because of almost an entire decade of predatory lending practices by less than responsible financial institutions like Bank of Wachovia.As a result, average Americans cannot obtain mortgages for new homes, small business owners cannot get credit for the purchase of products and materials they need, and more and more people everywhere have either had to take a pay cut, a voluntary leave of absence, or had their salaries frozen in order to help do their part to stem the tide in the hope that the world economy will not come to a screeching halt.World-wide other highly-industrialized nations keep watchful eyes on the economy on a daily basis as well. Nations like China, Germany, and Japan, all world economic leaders themselves, have lent the United States so much money over the past few years that their economic fate is now tied to ours. The United States government has made several bailout attempts thus far, with the stock market showing little response to the stimulus packages. A bailout for the banks, the stimulus check for the average citizen, a bailout for the auto and insurance companies, and now talk of possibly yet another stimulus check for the average citizen. All made ineffective due to widespread rumors of scandal and corruption. Bonuses paid out to top executives with government funds under the auspices of fulfilling contractual obligations instead of being used to keep corporations afloat have only damaged the perception that all is not lost. The economy, according to many experts, is on an unstoppable downward spiral the likes of which has only been seen before during The Great Depression of the 1930's.Yet, is that assessment an accurate depiction of where we are in the world today? Could we really be headed for such an economic breakdown that here in America the unemployment rate will again top 22%? Are we merely months away from standing in a soup line? Is our planets destiny doomed to repeat the past? I would submit to you that the situation we are in now, while dire, is nothing compared to the plight of our ancestors that was suffered last century. My thesis is that while times may be rough, a look back in time at the leader of the U.S. and the mechanisms his Administration put in place during the Great Depression in order to prevent another from ever happening will hold up. A compare and contrast if...

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