Recession or Depression

Essay by Timmy2GunnsCollege, UndergraduateA-, April 2009

download word file, 17 pages 5.0 2 reviews

An entire planet in a veritable state of panic. A worldwide economic crisis that affects almost every human being on the planet. A stock market that fluctuates, oscillates, and takes another nosedive every time we turn on the nightly news. Major corporations, the foundations of Americas economic strength in the world for decades have begun to falter, some have even fallen entirely. AIG, General Motors, Chrysler, Home Depot, Caterpillar, Merrill Lynch, Fannie Mae, Freddie Mac, corporations considered too large and too networked within the web of the world economy to ever fail, have. Credit has been virtually frozen by banks and lenders because of almost an entire decade of predatory lending practices by less than responsible financial institutions like Bank of Wachovia.

As a result, average Americans cannot obtain mortgages for new homes, small business owners cannot get credit for the purchase of products and materials they need, and more and more people everywhere have either had to take a pay cut, a voluntary leave of absence, or had their salaries frozen in order to help do their part to stem the tide in the hope that the world economy will not come to a screeching halt.

World-wide other highly-industrialized nations keep watchful eyes on the economy on a daily basis as well. Nations like China, Germany, and Japan, all world economic leaders themselves, have lent the United States so much money over the past few years that their economic fate is now tied to ours. The United States government has made several bailout attempts thus far, with the stock market showing little response to the stimulus packages. A bailout for the banks, the stimulus check for the average citizen, a bailout for the auto and insurance companies, and now talk of possibly yet another stimulus check for the...