The Economic Crisis: The Housing Crisis In The 21st Century

The Great Recession was a period of general economic decline observed by world markets beginning around the end of the first decade of the 21st century. The recession was a result of a financial crisis in 2007 which effected the years to come . The primary source of this problem was that banks were creating too much money. In addition, banks had doubled the amount of money and debt in the economy. Resulting in a financial crisis as the government and banks had failed to constrain the financial system’s creation of private credit and money.

The Great Depression and the 2008-2009 financial crisis were both a general economic decline that was observed all over the worlds markets that had devastating affects all over the world on people as many lost their jobs, homes and were left with very little to survive with . The Great Depression The Great Depression was an economic depression that was severe as well as worldwide that occurred in the1930s. The Great Depression varied across nations due to timing across the world, but for the majority of countries it began in 1929 and lasted until the late 1930s. The Great Depression was considered to be the longest, deepest, and also the worst depression of the 20th century. It had all kinds of effects in countries that were rich and poor.

The three presidents Jimmy Carter, Herbert Hoover, and Ronald Reagan had problems before and during their presidency like Herbert Hoover had “The Great Depression” that cause an economic collapse and it was the longest and severe depression. Jimmy Carter had economic issue like inflation, unemployment, and balancing budgets. Ronald Reagan had problems with tax cuts, interest rates, and the military budget. The three presidents had problems that’s when they different economic policies on the economy. Economic downfall was the effect of the stock market crash that encouraged the cause rapid increase in bank credit and loan.

The United States boasted the largest economy of the world in the 1920s, but the glory was soon followed by an economic crisis that would devastate the country. The Great Depression was the longest economic downturn the United States had ever experienced and lasted from 1929 to 1939. While there is a lack of consensus on exactly how the Great Depression came to happen, overproduction was a leading factor, along with poor banking practices that eventually led to bank failures, ruining millions of families. The Smoot-Hawley Tariff also greatly contributed to the emergence of this tremendous recession, aggravating world trade, thus weakening economies even more. During World War I, American farmers produced more food than usual to supply the armies and their European allies.

In October of 1929, the Dow Jones Industrial Average fell 25% in four days, this is defined as the Stock Market Crash of 1929. Billions of dollars were lost, countless investors were crushed by the amount of money they lost, and a plethora of people were forced into debt. The Stock Market Crash intensified the Great Depression, which was was a time of economic calamity in America in the 1920’s and 1930’s. The Great Depression was caused by the consolidation of overproduction, false prosperity, unemployment, banking crises, and the stock market crash of 1929. The overproduction of farm products, due to improved technology, and false prosperity caused deflation, which was a reason for the Great Depression.

During the Great Depression the unemployment rates were at 25%, which is extremely high for that time, and the rates for the Great Recession was 9% which is comparable to then because there are more people in the world than there was at the time of the Great Depression. This unemployment rate affect many people causing them to lose their job and find new work even though it was hard due to the economy being bad and this makes things get worse and a worse till something comes along and changes the outcomes. Also both of the declines in the economy had warning signs that either the government or people who knew the stock market backwards and forwards knew that something bad was about to happen and there was no way to fix it because it had already gone too far in the hole for them to fix it without having a catastrophe of some sort. Although

The great depression had affect Canada socially, as population changes occurred, as less immigrants go to canada, and birth rate changes, as well as death rates. Throughout the 1930s, Canada’s population growth reached their lowest point since the 1880s. Canada’s birth rate dropped from 13.1 live births per 1000 people in 1930 to only 9.7 per 1000 people in 1937. The lowest ratio until the 1960s. This affected the nation significantly, as the population decreases, not much children would grow up to work for the nation, thus creating less income and therefore not increasing the nation’s GDP as much as it can.

The worst recession since the Great Depression! The recent burst of the 8 trillion dollar house bubble, left the nation in shambles as the business orders are declining drastically- a startling 0.06 percent drop from the previous year. The consumer spending and business investments drying up, is leading to significant loss of jobs which brings into question- Is the government doing anything to stop this recession? Here are some fiscal policies that the government could enact to solve the crisis: 1) Federal Reserve should purchase a plethora of nonperforming financial assets from the balance sheets of banks. With congressional authority the Treasury will be able to buy financial assets from private banks, if 5 Fed is willing to help.

By doing this in 1983 the inflation rate had decreased by 5% (Source A), however, the control over inflation resulted in the economic recession of 1981 and high unemployment rates of over 3 million people without work. A letter signed by 365 economists was signed and sent to the Times newspaper stating that the economic policies of the UK should be reversed to aid the end of the recession (Source B). Thatcher responded with her well-known speech in 1981 to the Conservative party conference. However, great politics were shown, a decline in the Gross Domestic Product (GDP) and the unemployment crisis stayed unresolved until the mid-1980s. Thatcher held it as a main priority to reduce the power of trade unions to end industrial disputes as poor industrial relations where a large contributing factor to holding back the industrial sector of England.

The years of the 1930s were impactful for The United States forever. The Great Depression was the primary culprit of the change. During this time the economy hit an all time low and people were left with no, food, money, or hope. The decade impacted society in a negative way by leaving everybody poor. It both harmed and helped society when president Franklin Delano Roosevelt came into presidency.