Great Recession Of 2008 Cause And Effect Essay
Skrypnyk Veronika
ESL 6A
Cause-and-Effect Essay
The Great Recession of the United States
The Great Recession of 2000s in the United States was the long and extensive economic crisis since the Great Depression of 1929-32. A recession is an overall period of general economic decline. The bursting of an 8 trillion dollar housing bubble was the beginning of the Great Recession. In 2008 and 2009 the United States job market lost 8.4 million work position , or 6.1% of all payroll employment. It was the worst capitalist economic slump in the nation’s history. There are three major causes of the Great Recession in the United States: credit crunch and fall in bank lending, weak dollar, and sudden rise in price of oil. The primary cause of the Great Recession was the credit crunch and fall in bank lending. Time 2000-2006 was a period of powerful economic growth and minimal inflation. In this regard, banks lost their criteria for giving mortgages. Many homeowners received large mortgages with limited checks on ability to repay. In the middle of 2006 the American housing market bubble burst. Real estate prices began to rapidly decrease, and there started a rise in mortgage …show more content…
The depreciating dollar had contributed to cost-push inflation and declining in living standards , where consumer merchandises were more expensive leading to lower spending power of individuals. The United States is well known for importing diverse goods across the planet. But the United States did not have enough capacity to buy imports. This caused the country to lose on their price to rise, leading to the down fall. In his article in the Forbes Brian Domitrovic write,: “ In our own Great Recession , we had Dodd-Frank. This omnibus bill of the summer 2010 carpeted the financial industry with regulations.” The very existence of Dodd-Frank has allowed its advocates to presume that a lack of regulation caused the panic of
ESL 6A
Cause-and-Effect Essay
The Great Recession of the United States
The Great Recession of 2000s in the United States was the long and extensive economic crisis since the Great Depression of 1929-32. A recession is an overall period of general economic decline. The bursting of an 8 trillion dollar housing bubble was the beginning of the Great Recession. In 2008 and 2009 the United States job market lost 8.4 million work position , or 6.1% of all payroll employment. It was the worst capitalist economic slump in the nation’s history. There are three major causes of the Great Recession in the United States: credit crunch and fall in bank lending, weak dollar, and sudden rise in price of oil. The primary cause of the Great Recession was the credit crunch and fall in bank lending. Time 2000-2006 was a period of powerful economic growth and minimal inflation. In this regard, banks lost their criteria for giving mortgages. Many homeowners received large mortgages with limited checks on ability to repay. In the middle of 2006 the American housing market bubble burst. Real estate prices began to rapidly decrease, and there started a rise in mortgage …show more content…
The depreciating dollar had contributed to cost-push inflation and declining in living standards , where consumer merchandises were more expensive leading to lower spending power of individuals. The United States is well known for importing diverse goods across the planet. But the United States did not have enough capacity to buy imports. This caused the country to lose on their price to rise, leading to the down fall. In his article in the Forbes Brian Domitrovic write,: “ In our own Great Recession , we had Dodd-Frank. This omnibus bill of the summer 2010 carpeted the financial industry with regulations.” The very existence of Dodd-Frank has allowed its advocates to presume that a lack of regulation caused the panic of