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

Similarities Between The Great Depression And The Great Recession

992 words - 4 pages

The housing crisis in America is a major problem plaguing the United States' economy. Before a solution is formulated, one must consider the history of the market and the causes of the problem. And after a solution is formulated, one must present an idea for prevention of the problem for the future.
Many people see similarities between The Great Depression in the late 1920s to the late 1930s. The Great Depression was caused by the Stock Market Crash of 1929. Leading up to the crash was The Roaring Twenties. It was right after World War I. The United States' economy was stimulated by producing things for the war. People seemed to have a lot of money. There were many new technologies and new infrastructure. There was a new concept of credit nicknamed "buy now, pay later." Not long after this concept came to be, the stock market crashed.
For the decades before the current housing crisis, buying homes and loaning money was a simple, but strict, affair and had had two outcomes. Either the borrower could pay back the money owed or they could not pay the money back. If the borrower could pay the money back, they could keep their house or whatever they took out the loan for. If they could not pay the money back, the lenders repossess the things that were not paid for. When this happens with a house, it is called foreclosure.
Leading up to the crisis of the housing market, borrowers got mortgages without understanding the terms. Banks were giving out loans to people the banks weren't sure could pay the money back. The closer to the crisis, the higher the frequency of illegitimate loans and mortgages. Because there were so many mortgages on houses that could not be paid back, millions of mortgages were foreclosed on, and the houses were repossessed. To make matters worse, new housing developments were being created in many cities. What happens next is basic supply and demand. There are millions of houses and few people buying houses. The cost of houses plummeted.
I suppose there are quite a few similarities between the two. People were buying things on credit or loan they could not pay back. Laws were made both to help and prevent the situation.
The housing market is not the only part of the economy that has suffered. Many states had already been suffering from the recession, revenue is even lower because of fewer purchases of houses. The labor market and industry have been suppressed as well.
To find a solution, we need to look at what we want to accomplish. We want more commerce within the housing market and fewer illegitimate mortgages. When we go back to the idea of supply and demand, we are faced with two options to increase commerce. We can either have fewer houses, or we can make people want houses more. Since destroying existing houses is foolish, we assume we need to increase demand for houses. To have fewer illegitimate mortgages, banks will have to give...

Find Another Essay On Similarities Between the Great Depression and the Great Recession

The Great Recession Essay

801 words - 3 pages 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 Great Recession Essay

1209 words - 5 pages Great Depression. ("The Great Recession", United States government needed to do something to help save its economy and help pull its country back out of recession since the consequences that this recession had on the United States were devastating and affected a countless amount of people. That is the reason why the 111th United States Congress in the month of February in the year 2009 passed the American Recovery and

The Great Recession

833 words - 4 pages Many economists have come to consider the 2008 financial crisis as the worst recession since the 1930’s Great Depression. The recession led to the total collapse of financial institutions, the withdrawal of banks by the national governments and the total collapse of stock markets across the world. The housing market also suffered in many areas, which resulted in prolonged unemployment, evictions and foreclosures. The crisis played a key role in

The Great Recession - 1544 words

1544 words - 6 pages In the final quarter of 2008 the world economy started a period of global economic slowdown, which became known as the “Great Recession”. The situation is especially severe in the Eurozone countries. “In 2010, Greece’s GDP dropped from 235 billion euro to 230 billion euro, a 4.5% decline and the unemployment rate hit a record high of 28% in the last quarter of 2013 making it the country’s worst recession since 1974.”(Tsafos, GDP) As a result

The Great Recession - 1186 words

1186 words - 5 pages The Great Recession In 1929 the United States was faced with the beginning of the Great Depression. As the finishing bell rang on Wall Street on what become known as “Black Tuesday” the Dow Jones Industrial Average dropped thirteen percent and the following day dropped another ten percent. This was the beginning of one of the worst decades in U.S. history. Over the next four years unemployment would sky rocket from three percent all the way

Steel Prices and the Great Recession

1056 words - 4 pages Section 1 In the Wall Street Journal article titled, “Industry Cuts Back As Steel Prices Fall,” writer Robert Guy Matthews discusses recent changes in the price of steel in the U.S. He also discusses past and potential future influences on U.S. steel prices. These influences include the domestic supply and demand of steel as well as foreign supply and demand in the global market. Supply and demand have been mainly shaped by the recession at

The Great Recession Of 2007

3273 words - 13 pages , the Glass-Steagall Act kept the banking and investment industries separated. This act came after the great depression when regulators called for separate industries. Then in 1999, they wanted to repeal this act because they believed they were smarter now and would not let another incident happen like it did in the 1930's. But as you can see, they abused the deregulation and let the greatest recession happen since the depression (Montanna 2010

Roosevelt and the Great Depression

1531 words - 6 pages replace those that found some of his measures unconstitutional. This brought resentment from Congress and so the willingness to push through any legislation that characterised Roosevelt’s first term was gone. He began to find it much harder to get congressional approval. Perhaps the greatest blow to Roosevelt's attempts to combat the Great Depression was the economic recession of 1937. This wiped out much of the gains up to 1936. This was

The Great Depression and Today

1021 words - 4 pages Hardy PAGE \* MERGEFORMAT 1 Chris Hardy & Alex KhomyakovStewart History 8th CPFebruary 8, 2009The Great Depression and TodayThe economic downturn and the subsequent recession had many on Main Street wondering what happened. America was glued to the news as we watched our stock's become worthless and our government panic; we then looked out our windows and realized it was all too real. We saw our neighbor's homes foreclosed on, and the pain

The Great Depression and Policies

655 words - 3 pages Following an era of economical prosperity, the Great Depression, otherwise known as the ugliest sister of the 1900’s family, which lasted an entire decade from 1929 to 1939, began on a fateful day with the New York Stock Exchange abruptly crashed and was unable to recover quickly. This occurrence, of course, had an unforgivable effect on the economy, leading to one of the most memorable and significant eras in American history. Not only

Australia and the Great Depression

698 words - 3 pages doubled to 20 percent by mid 1930. Reaching a later record devastating peak of 32 percent in mid 1932. The Great Depression affected Australia in many different ways. One being socially, it led people out of jobs which ultimately left families without homes. Many fathers left the households in search of jobs in the countryside and or become alcoholics. Many of the mothers cohabited with the male boarders with hope of financial support. Many sons

Similar Essays

Great Depression Vs. The Great Recession

1909 words - 8 pages downturn, the nation enters what is known as a depression. In 2008 America entered a recession and its consequences were severe enough for some people, such as President Barack Obama, to compare the recent crisis to the world’s darkest economic depression in history, the Great Depression. Although the Great Depression and the Great Recession of 2008 hold similarities and differences between the stock market and government spending, political issues

Comparing The Great Depression And The Great Recession

1140 words - 5 pages not as devastating as the Great Depression, it still had a big impact on the economy. The Great Depression and the Great Recession were very similar to each other. First of all, both were preceded by good economic times. Between 1921 and 1929, the annual real economic growth was at 4.4%, and between 1982 and the 2000s, the annual real economic growth was at 3.2%. This is just one similarity of the two arduous times. Another similarity is that

Comparing The Great Depression To The Great Recession

1230 words - 5 pages Comparing the Great Depression to the Great Recession The Great Depression and the Great Recession of the early 21st Century have many things in common. The Great Depression and the Great Recession both experienced good economic times before they crashed. Prior to the Great Depression, (1921-1929) the annual real economic growth was at 4.4 percent. Though less, the annual real economic growth prior to the Great Recession was at 3.2 percent

Unemployment And The Great Recession Essay

1568 words - 6 pages population. Language barriers can also, be considered a cause. As a result of, the growing unemployment, these groups have turned to crime. For instance, the black population is branded as violent. It is true that there has been little that has been done so as to amend the gap between dominant population and the minority population. This is why the minorities have been discriminated against economically. With the recession the dominant population took