This is one the the biggest crisis's in our nations history. We as a country have been in debt for the last few years but when the words "Depression" and "Recession" started to be brought into the conversation it really started to dawn on people that this was bad and not just a passing problem. On September 27, 2000 the government announced a 122 billion dollar surplus for the year 1999 and for the year of 2000 the national deficit rose to a Record high 370 billion (surpassed by every year up till now and it will be higher this year).Now many might would equate this with the clinton to bush transition but i want to figure out if it did change so much because a new guy moved into that nice house on 1600 Pennsylvania Avenue or if the problem goes way deeper and involves more people, bad decisions and greediness.
One of the biggest issues that led to the bad economy is the fall of the housing market in 2007. Because of the billions of dollars in unpaid mortgages many investment banks (such as bear sterns) began to lose money and rumors that the bank would fail and bear sterns stock went from $171 to $57 a share very quickly which then led to a merge of bear sterns and JPMorgan. Within the next few months three of the biggest investment banks in the world (Fannie mae, Freddie Mac and lehman brothers) all declared bankruptcy. Within 24 hours of the lehman brothers bankruptcy the stock market crashed and all around the world credit markets froze. In response to this Congress would pass a $700 billion dollar bailout plan. The secratery of treasury Timothy Geithner's decision to loan money to all of these investment banks was "possibly the most irresponsible and destructive decisions in US history" says nobel prize winning economist Paul Krugman.
Many people believe that the first decsions that led to the economic down turn was the descion to go to war. Wars cost alot of money that the US already did'nt have and that started to increase the national debt dramatically. Now finding a job is the hardest thing to do with employers not hiring anyone because a paycheck decreases their profits.They people who has taken the brunt of the heat from the public is the ceo's of the big companys who are seen as greedy and manipulative so the public blames them, but thats good because its always good to have a publis scapegoat. So i know that many people dony agree with the new economic stimulus plan but according to most it seems like the only way to get out of this mess.
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