ipl-logo

2008 Recession Policy Analysis

760 Words4 Pages

Running head: Policies 1 Policies 5 Policies & The Recession John C. Halliday Macroeconomics Benjamin Davis? Policies & The Recession The economic meaning of a recession is two consecutive quarters of negative economic growth as measured by the U.S. GDP. This could be caused by a decrease in aggregate demand or in aggregate supply. In 2008, the United States economy first achieved no growth, and then entered a decrease in total output of goods and services causing a recession. During this time …show more content…

Money spent on public goods and infrastructure contributes to the total demand for output in a nation. Government spending leads to further increases in consumption and investment by firms. The government could also cut taxes, which would cause aggregate demand to shift to the right, increasing output and employment. In the Recession of 2008, the Fed provided cash to some central banks so that loans could be made to local banks with problems for lending purposes to consumers. But not all firms could get loans to buy materials and cover payrolls. As a result, production ground to a halt and workers were laid off. A well-functioning government would have tried to contain the growth in entitlement that led to a higher debt ceiling resulting from the …show more content…

If the Fed had not reacted as aggressively and as quickly as it did, the economy might be still shrinking today. Critics have accused the Fed of overstepping its mandate by implementing these monetary policies. They had lowered interest rates to nearly zero and engaged in ways to bring down long-term interest rates. Congress even established the Troubled Asset Relief Program (TARP), which injected much needed capital into banks. It helped restore stability to the economy and end the free fall of the housing market and auto market. TARP funding was used to mitigate housing foreclosures, and make the bankruptcies of General Motors and Chrysler relatively orderly. Without these monetary policies in affect, the Recession of 2008 was estimated to continue into 2011. I found the monetary policies were more financially important than the fiscal policies. (Blinder

Show More
Related

  • How Did Andrew Jackson Create An Economic Crisis

    179 Words  | 1 Pages

    Unfortunately, by giving out more loans, the state banks had put more paper money into circulation, causing the value of the dollar to plummet. Inflation hurt the economy which

    Read More

  • Fiscal Policy: American Recovery And Reinvestment Act Of 2009

    292 Words  | 2 Pages

    Fiscal policy Following the great recession that lasted between December 2007 and June 2009, the federal government undertook several actions to promote growth and development. The government used a fiscal stimulus package worth $787 billion and a bank bailout measure worth $700 billion. In addition, the government passed the American Recovery and Reinvestment Act of 2009 to help create and save jobs. All these measures helped in providing some form of economic relief against the effects of the recession.

    Read More

  • How Did The Great Depression Affect Canada

    1334 Words  | 6 Pages

    During the 1930’s, there was an economic crisis and a significant increase in unemployment and the government's poor attitude toward the depression. Therefore, the actions of the Government were a primary factor in contributing to the Great Depression. The Government’s response to the stock market crash of 1929 and economic crisis were the

    Read More

  • Franklin D Roosevelt Research Paper Outline

    728 Words  | 3 Pages

    This tragic event sent Wall Street into a complete frenzy and took out millions of investors. Over the next few years, consumer investment and spending decreased. This caused sharp declines in manufacturing production and rising levels of unemployment. By 1933, 13 plus million Americans were unemployed and nearly half of the country’s banks failed (Coker, 2005). Thanks to the reform and relief measures placed by President Franklin D. Roosevelt helped diminish the most horrible effects of the Great Depression.

    Read More

  • What Are The Similarities Between Great Depression And The Great Recession Of 2007

    957 Words  | 4 Pages

    In the Recession of 2007 the economy used the monetary and fiscal policy to keep the economy falling into another Great Depression. In the Recession was greatly used  to fix the economy but was fairly new in during the Great Depression since it was established in

    Read More

  • Famous African-American Ministers Essay

    439 Words  | 2 Pages

    During this time,

    Read More

  • Was President Reagan A Liberal Or Conservative

    1268 Words  | 6 Pages

    This was known as, “the worst economic disaster since the Great Depression of 1929” (Amadeo-Obama). One of Obama’s first orders of business was the American Recovery and Reinvestment Act of 2009. The idea of this was to give $787 billion back to the American people through new benefits for the unemployed and disabled, and also through cutting down taxes. In turn, this put about $250 billion back into the economy and got us out of the deep economic hole we were in. One of Obama’s campaign promises was to improve healthcare for the people.

    Read More

  • The Stock Market Crash Of The 1920's

    226 Words  | 1 Pages

    The government offered no insurance or compensation for the unemployed, so when people stopped earning, they stopped spending. The consumer economy ground to a halt. An

    Read More

  • The Forgotten Man Amity Shlaes Summary

    623 Words  | 3 Pages

    During the Great Depression “the currency was becoming more valuable every day, rarer and scarcer” (Shlaes 108). The Great Depression was the reason to change and reform government. Even though Shlaes wrote Roosevelt and his New Deal made the Depression stay longer, but in reality to recover from the Great Depression, Roosevelt New Deal helped economy to get back in track. The New Deal made the government to be more involved in people’s life. New Deal used Government as an agent and started to intervene in the economic institution in order to recover from the failure.

    Read More

  • Henry Paulson Great Depression Summary

    438 Words  | 2 Pages

    The biggest enemy to the end of the financial crisis and the beginning of an economic recovery is Treasury Secretary Henry Paulson himself. Lets forget for a minute that the decision by Paulson and Bernanke to let Lehman Brothers fail was the precipitating event leading to credit markets freezing up and the first round of financial panic. Since then, the two have been working diligently to correct this collosal mistake. But separating actions from words, we see that words are in fact much more potent. Since the end of September, every time Henry Paulson has opened his month, the Dow has dropped on average 196 points.

    Read More

  • Great Recession Research Paper

    711 Words  | 3 Pages

    Many families and businesses struggled to make ends meet. Many of the Fiscal and Monetary policies implemented received a lot of criticism due to the amount of money that had to be initially invested to help get the economy flowing again. From 2007 to 2009 the government implemented Economic Stimulus Act, the Emergency Economic Stabilization Act and the American Recovery and Reinvestment Act. The three fiscal policies were designed to help get the housing market up and running again, as well as help provide tax incentives to families and businesses. Also, some of these did help bail out some major banks and even car dealers.

    Read More

  • New Deal Dbq Essay

    564 Words  | 3 Pages

    Although Roosevelt’s administration was not very effective in immediately ending the Great Depression, it left a lasting effect on the role of the federal government by creating

    Read More

  • How Did Theodore Roosevelt Affect The Economy

    1215 Words  | 5 Pages

    He promised that the government would intervene in the economy to provide relief for the great depression, he proposed a ‘new deal’ that would give millions of Americans jobs and create a more stable US economy. “Roosevelt faced the greatest crisis in America since the Civil War.” (Franklin D. Roosevelt Biography). In the beginning of his presidency, he began to make good on his promises, he created many agencies and associations to help get the economy under control and to help lower the unemployment rate. As the economy was stabilizing and the unemployment rates and GDP were beginning to rise back up to normal levels, he fell under criticism for putting too much power in the government’s hands for controlling the economy.

    Read More

  • The Great Depression: Turning Point Of The United States Economy

    655 Words  | 3 Pages

    The Great Depression was a major turning point for the United States’s economy because it changed the relationship between the government and the economy. Before the Great Depression, the economy was a Laissez-faire style market where the government had no influence on private party transactions and businesses. After the Stock Market Crash of 1929, the people of the United States sought for reliefs from the government. The Government responded by creating tax reforms, benefiting the stock market, wheat prices, employment, and the number of bank suspensions, and providing comfort for the people. As a result of their disparity, the people put their trust in the government in hopes that they would repair the broken economy.

    Read More

  • Thesis Statement: The Great Depression

    765 Words  | 4 Pages

    If you got lucky and did not get fired the wages fell and the buying power increased. The americans that were forced to buy on credit fell into debt,and the numbers of repossessions and foreclosures increased steadily. The gold standard fixed currency exchanged around the world, and helped spread economic distress from the U.S. through the world.7When the country elected Franklin D. Roosevelt he promised he would create federal government programs to end the Great Depression.8 The federal government programs allowed people to get more jobs and help the economy increase. Roosevelt was a big influence during this time period and impacted many people, giving jobs to citizens and boosting the economy. After Franklin Roosevelt created the federal government programs it allowed the economy and society to grow and strength from the unlucky situation.

    Read More

More about 2008 Recession Policy Analysis

Open Document