What Caused the 2008 Recession?
I strongly believe that we are already well into a recession. Over the past several months I have educated myself on past recessions and the Great Depression. My main interests have included the economic factors leading up to, during and following these recessions, including the Great Depression.
What happened? How do we prevent a deep recession and bounce back quickly? Will we survive with very little pain and move our economy back on track quickly? Will we sink into a severe recession or even a full blown depression? Take the time to educate yourself. Take a look around and see what is happening in our country now and what happened in the past. How did previous economic downturns affect Americans, from the poor to the rich? Does history really repeat itself? And, if it truly does then, what does history show us for a timetable for things to turn around?
I think we very well may experience what the Americans of the past experienced. I hope not, but just in case, it is good to be prepared. Make no mistake, we are currently in a recession. Many companies and individuals are already suffering. This is a crisis.
What Caused This to Happen?
First of all, with mortgages far too easy to purchase and very little scrutiny, bad mortgages ran rampant. “Flippers” used shaky data to arrange credit for sight-unseen real estate with the intent to sell before the first payment was ever made. Risky mortgages were bundled into securities and sold on Wall Street. Big funds, frenzied for a higher rate of return, ignored the risks. All resulting in the creation of a “perfect storm.” This was followed up by lack of oversight by the Federal Reserve. This is what has ushered us into this recession of 2008.
How to Fix Things
A rebate alone will only prolong and create a much deeper recession. We have to solve the mortgage crisis, as well.
Here’s how to do that. It is simple. It’s called hair of the dog. We simply repeat the process that got us into this mess in the first place. We should make borrowing so cheap and mortgage interest rates so low so that everyone, homeowners and business owners alike, can refinance with simple, solid, low fixed-rate loans. If we do that, we can prevent a severe recession and create a solid comeback in the American economy.