What Caused the 2008 Recession?
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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.
September 28th, 2008 at 11:19 am
i think that the republicans do not know how to handle the economy and shame on bush for sending u.s sodiers to fight in iraq. i think that obama would would handle the economy better and if john maccaine wins then the u.s in alot of trouble
September 28th, 2008 at 11:45 am
Hi Christian,
Thank you for the comment.
I’m of the opinion that neither of the major political parties are competent to handle the job, especially by themselves. I think they work best where one has Congress and the other the White House as in the Clinton years. They can check each other’s worse instincts and work together to solve real problems.
I also think that no matter who wins that we’ll be in for significant economic pain for a while.
October 10th, 2008 at 12:39 pm
Quite interesting, that the main cause of the reciession is intrest only, reverse mortgage and adjustable rates which are all prohibited by Islam!! and known as Riba, they are replaced instead with Murabaha, Musharaka…etc!!!
There are many studies shoiwng that following this western econmic system of interests always end in a recession cycle sooner or later
October 23rd, 2008 at 5:12 am
the world bank with its corupt iluminatia are causing this reccession to control us,we know who they are and they are going to get away with it,
November 30th, 2008 at 9:46 am
Now, I am not an economist, but i heard a friend say that this was predicted in the 70’s. According to her, in th 70’s the US government printed too much money and put it into circulation, without having enough gold. Since, as a result, the value of the dollar was reduced to that of tissue paper, the US made a law stating that all trade in oil will be made in US$. A lot of nations agreed and formed the OPEC laws. Iraq didn’t. Hussain (R.I.P) said that they would deal with Britain in Pounds, Japan with Yen and so on.Hence the war on Iraq. Oil Prices inflated without reason and this sabotaged the growth of multiple economies. Now, I would not be too sad, since its a cycle, and a good time to invest will arrive shortly. The problem is the fact that I am broke!!
lol!!
and that in many nations, like India, the domestic market is forsaken for the sake of profits in the international market.
If you want, you can get in touch with me @
sowmyabhattacharya@gmail.com
December 23rd, 2008 at 5:33 pm
According to the guy that knows everything, Rush Limbaugh its the Democrats fault because of the low interest loan programs (Freddy, Fannie etc.) started during the Clinton era. My take is that these programs were good ideas gone bad in that they started out with the usual safety devices in place i.e. documented loans, decent if not perfect credit, and a job, and over time the financial institutions put pressure on the Bush administration to loosen up the regulatory process using the old “bad for business” ploy. Comments?
March 20th, 2009 at 7:41 pm
Man can’t anybody read?! The simple cause was–people who didn’t deserve mortgage loans or should have not qualified for loans took out mortgage loans they couldn’t afford. It’s the Democrat’s fault for wanting to give everyone the opportunity to “own the American dream” and the Republican’s fault for allowing it to happen. What about the stupid people like me who were cautious and who have always paid their bills and mortgages ON TIME and lived within their means? I’m not standing in line for a bailout. We are the “Forgotten”–the ones who simply live the way they should live without getting greedy and who mind their own business and don’t expect a handout or a bailout when they screw up.
Free economy can fail once in a while. Things were WAY out of whack.
March 24th, 2009 at 12:18 am
Why does it all have to be one person or on group’s fault? I’m on this site to study the recession in the context of environmental stability and, so far, through all my research, it seems like the recession is the product of multiple factors including uninformed lending of money, western economic policy and society based materialism. It’s all our own fault (because you know that you too are contributing to the problem) and the only way to stop it seems to be to change our attitude towards consuming products and material goods and move towards sustainable economic growth which includes the conservation of resources to minimize the overpricing of basic natural resources.