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

The 2008 Economic Recession Essay

1308 words - 6 pages

The 2008 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.
Looking back to the Carter and Reagan Administration’s, you can begin to see where the Recession originated from. Prior to the Reagan administration, the United States economy experienced a decade of rising unemployment and inflation. Political pressure favored stimulus resulting in an expansion of the money supply. Reagan wanted to increase defense spending while lowering taxes, Reagan's approach was a departure from his immediate predecessors. Reagan enacted lower marginal tax rates in combination with simplified income tax codes and continued deregulation. During Reagan's presidency the annual deficits averaged 4.2% of GDP after inheriting an annual deficit of 2.7% of GDP in 1980 under President Carter. The real

Shelinsky 2
inflation rate of growth in federal spending fell from 4% under Jimmy Carter to 2.5% under Reagan.
Not only did Carter and Reagan Administrations help cause the Recession, President Clinton helped. “Clinton then established official government policy to increase home ownership to 70%. Under President Clinton, the percentage of young families in poverty declined to 25 percent by 2000.” (Perry) But it then started up again with the recovery of “Reaganonomics” under President George W. Bush, reaching the 37 percent mark which led up to the 2008 financial crisis. “An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment banking business. The Glass-Steagall Act was sponsored by Senator Carter Glass, a former Treasury secretary, and Senator Henry Steagall, a member of the House of Representatives and chairman of the House Banking and Currency Committee. The Act was passed as an emergency measure to counter the failure of almost 5,000 banks during the Great Depression. The Glass-Steagall lost its potency in subsequent decades and was finally repealed in 1999.” (Investopedia) Clinton repealed this act which limited the regulation of the banking industry. This allowed depository and investment banks to merge while the latter limited the regulation of financial products. The Carter and Reagan Adminstrations, along with Clinton led the United States to the 2008 Recession.
Consumer spending is the...

Find Another Essay On The 2008 Economic Recession

How has The 2008 Recession affected Third World Countries?

1659 words - 7 pages Introduction The American economy affects everyone, regardless of their societal status. Therefore, when the American Economy is in recession, the whole world falls into a state of trauma, millions of jobs are lost and multi-national companies are forced to shut down. In America alone 2.8 million jobs were lost in 2008 (source: CNN money). If the tolls were so high in one of the stronger economic states what of the less resilient? Why I chose

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

Analysing the Recent Economic Recession and Its Effects

1504 words - 7 pages The business cycle is the short-run alternation between economic downturns and economic upturns (Investopedia n.d.). A recession is an economic downturn and happens in every country and some recessions are worse than others and the output of GDP and employment are falling farther and faster. The great depression lasted from 1929-1933 and was a deep prolonged downturn in the business cycle before a recovery/expansion of the business cycle

H.R. 1424, the Emergency Economic Stabilization Act of 2008

2499 words - 10 pages H.R. 1424, the Emergency Economic Stabilization Act of 2008. In the wake of the United States 2008 financial crisis, the government became pressured to act and the federal government needed a way to help. In late 2008 HR1424, commonly known as the Emergency Economic Stabilization act, was proposed to congress, and signed by president bush. This legislation was a way to remove the burden from banks, whom during the mortgage crisis, came

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

Social marketing: building brand value and influence in the UK tourism industry to sustain brand consumption in the current economic recession

772 words - 3 pages Social marketing: building brand value and influence in the UK tourism industry to sustain brand consumption in the current economic recession 1.0 Chapter one: introduction 1.1 Background The current economic recession that began in June 2008 and intensified in 2009 had an effect of decreasing international tourism which was also augmented by outbreak of AH1N1 flu virus in 2009 which resulted into restriction of international travel. The

Recession and its Ill Effect

687 words - 3 pages following section will discuss how the economic activities in US has actually decreased since the beginning of market turmoil. Fall in Consumer Consumption Expenditure: Consumption Expenditure is the most integral component of GDP calculation and consumer consumption accounts for 70% of total consumption expenditure. Since the advent of recession, US Economy saw fall in consumer consumption expenditure which during third quarter of 2008 changed by

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

2183 words - 9 pages Since the mid-1900s, the United States (U.S.) has experienced ten noteworthy recessions (BLS, 2012). The recession in the most-recent memory has been coined the Great Recession, and it officially lasted from the end of 2007 through the middle of 2009 (BLS, 2012; Economic Policy Institute, n.d.). Keynesian supporters promote government intervention when economic conditions weaken in order to reestablish consumer confidence, encourage spending


1019 words - 5 pages A recession is where there is temporary economic deterioration which lasts longer than a few months, sometimes years. This can be seen by the employment rate decreasing and the reduction of trade and industry work. This is determined by the Gross Domestic Product (GPD) which is a government statistic which shows the total country’s economy movement. This is measured every 3 months (quarterly) and it is said that if after two consecutive quarters

Repercussions of the Great Recession and the Impact of Unemployment Towards the Medical Conditions and Family Life in the United States

1307 words - 5 pages ). Complete A-Z Business Studies Handbook. Great Britain, London: Hodder & Stroughton Lipsey, R.G., Chrystal, K.A. (2007). Economics. New York, NY: Oxford University Press.p. 636-640 McInerney, M., Mellor, J.M., Nicholas, L.H. (2013). Recession depression: mental health effects of the 2008 stock market crash. CESifo Working Paper (4263). Germany, Munich: Ifo Institute. Center for Economic Studies Starr, M. (2011). Consequences of economic downturns: Beyond the usual economics. New York, NY: Palgrave MacMillan Simpson, S. (2011). Five long-term consequences of the great recession. Forbes Magazine. Retrieved from

The Dissection of the Great Recession

1002 words - 5 pages for The Great Recession of 2008-2009 was an external force. Colander suggests that structural stagnation was the root of the recession. In this chapter, one of the positions he argues is from the housing sector. He argues “until [the] inventory of unoccupied housing is eliminated, employment in the construction and real estate will be low, pulling down the overall rate of economic recovery.” (Colander 2012, 243 ) An modern example of this is the

Similar Essays

The Economic Recession Of 2008 Essay

2314 words - 9 pages Ever since the Recession of 2008, the process of acquiring employment has become extremely challenging and exhausting. After months of searching, a significant amount of job seekers are willing to accept any job offers that will allow them to put food on the tables. If you follow the United States’ economic recovery, you probably know that there are about 10.5 million unemployed Americans and constant debates about how to create more jobs. What

Causes Of The 2008 Us Recession

1821 words - 7 pages Many people today would consider the 2008, United States financial crisis a simple “malfunction” or “mistake”, but it was nothing close to that. Contrary to what many believe, renowned economists and financial advisors regarded the financial crisis of 2007 and 2008 to be the most devastating crisis since the Great Depression of the 1930’s. To make matters worse, the decline in the economy expanded nationwide, resulting in the recession of 2007

The Video Game Industry And The Recession Of 2008

783 words - 3 pages The Video Game Industry and the Recession of 2008In our days, videogames are starting to be more recognized as a powerful entertainment outlet. Because of this, there are more people playing games every day. Since 1971, the game industry evolved economically. In June 2011, the global video game market was valued at US$65 billion. But, even this great industry has had its share of economic troubles. One of them has been the 2008 recession. So

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