State Of Economy Essay

686 words - 3 pages

An economy, as defined by the Webster Dictionary, is the wealth and resources of a country or region, in terms of the production and consumption of goods and services. An economy, as defined by the vernacular, is a word that has become linked with synonyms that invoke feelings of dread, depression, collapse, and flat out anarchy at best. Both close to home and globally, people have felt some effect of the market crash. Since 2007, millions of Americans lost their homes, jobs, and feelings of financial security. To even begin to think about possible solutions to the current state of the economy, one must first understand the origin of our problems. We are in a recession today because of a weak job market, risky mortgages, and a heavy reliance on faulty financial formulas in the stock market.
For many people, it seems to be harder to get a job now than ever before. These feelings are well supported by cold statistics. Information gathered by the U.S. Bureau of Labor states that in 2006, about 5 million Americans were being hired every month. Now, in 2011, that number has plummeted down to an average of 3.5 million. But wait, where did all the jobs go? That question has remained on center stage in Washington since 2008 and has continued on to become a key political component in the preliminary stages of the 2012 Presidential Election. Although the loss of hundreds of thousands of jobs can be attributed to offshore outsourcing, sluggish recovery plans, and a significant shift in the demand for workers, many analysts ultimately believe the problems gained headway through panic experienced during the downfall of the housing market.
In 2006 the U.S housing market was experiencing a boom. Low interest rates and easy credit conditions roused the state of the economy and encouraged debt-financed purchases. People began saving less, spending beyond their means, and taking out more mortgages than ever before. The demand for houses, along with a belief that home values would continually soar, fueled the building boom that would eventually result in our demise. Once the grace period on mortgage loans ended, and house prices began to decline, many people found themselves unable to escape the high monthly payments and began to default. Increasing foreclosures continued to lower the prices of homes, by 2008 it was...

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