“The Great Recession 2007-2009”
Since 2007, the US economy has encountered hostile financial conditions. From the rate of unemployment which peaked at 10.1 percent in 2009 (Center for Economic and Policy Research, 2010), to the housing crisis, slow economic growth, devalued US dollar, collapse of the financial industry and loss of confidence by investors, two administrations and the Federal Reserve reacted with various monetary policies. This paper will seek to outline the major events which led up to the recession in 2007, identify possible though debatable causes and actions taken by Presidents Bush and Obama as well as the Federal Reserve to save the country from the financial catastrophe of the “Great Recession.” December 2007 marked the official start of the second great depression in US history. This lasted until 2009. The formal designation was conferred by the National Bureau of Economic Research (NBER), a group of economists charged with the responsibility of dating the start of significant economic downturns. Prior to the proclamation, the country experienced a housing boom in 2007 which featured extensive purchases and sales of housing inventory. Additionally, the exuberant market drove many to acquire mortgages which they could not afford particularly, at adjustable rates. During that time, oil prices also climbed thus creating a volatile formula for the financial meltdown. One reason for the recession noted by the National Bureau of Economic Research was the extensive deterioration in the labor market; the precursor which started the depression. This subsequently escalated as employers eliminated 1.2 million jobs during the first ten months of 2008. The group made this determination by assessing the personal income, retail and wholesale sales as well as industrial production and GDP which measured the recession. Numerous other causes have also been blamed for the “Great Recession of 2007-2009.” One popular culprit was deregulation...
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