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One World Economics

In: Business and Management

Submitted By empalmer
Words 1799
Pages 8
It is my belief that the primary cause of the current U.S. recession was a collapse of the U.S. housing market, which in turn was ignited by defaults in the subprime lending market. Then the domino effect happened with the stock market crash, businesses closing, and unemployment on the rise. Much like the cycle of life, economics is the cycle of existence and it just goes around and around. As it progresses it may affect the length of time it takes to get through certain seasons of the cycle on its rotation. We are just one world, whether we choose to function as a planned economy or a free market economy, because, at the end of the day, we are all interacting and doing business with one another.
According to the National Bureau of Economic Research (NBER), a nonpartisan economic research organization based in Massachusetts, a recession is defined as a significant, protracted decline in economic activity that spreads throughout the country, affecting various economic indicators such as income, employment, retail sales, and industrial production. Somewhere between the late 2006 and early 2007, U.S. policy makers started to see some of these signs of recession in the U.S. Take for instance, the number of unemployed workers began mounting and housing prices, which had been booming for numerous years, fell rapidly.
In January 2009, facing what seemed to be the worst economic crisis since the Great Depression of the 1930s, the incoming Barack Obama administration worked with Congress to pass an economic stimulus bill, the American Recovery and Reinvestment Act, which was a $787 billion package designed to boost economic growth with a mixture of tax cuts, aid to states, and infrastructure spending. All of this spending was under President Obama; the government also spent monies to bail out banks and other financial institutions. In addition, more federal funds were…...

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