THE Great Recession
"The Great Recession—which officially lasted from December 2007 to June 2009—began with the bursting of an 8 trillion dollar housing bubble. The resulting loss of wealth led to sharp cutbacks in consumer spending. This loss of consumption...led to a collapse in business investment. As consumer spending and business investment dried up, massive job loss followed" (The Economic Policy institute, para. 1). |
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Property insurance companies, banks, and citizens all suffered during the Great Recession. Foreclosures occurred after many citizens had to default on their loans. The Federal Reserve was effective in stopping financial crises like the Great Recession. It introduced lending programs for companies and lowered interest rates. By constantly improving policy, the Fed has kept the American economy moving forward.
"[Ben Bernanke and the Fed] slashed rates lower than they've ever been in the U.S. and then pumped enough liquidity into the system to send the Fed's balance sheet swelling north of $4 trillion today, compared with less than $900 billion before the crisis" (Egan, para. 11). |
(Photo Courtesy of 'This is Money')
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"The Federal Reserve took a number of extraordinary steps to quell the financial panic. In late 2007, it established the first of what would eventually become an alphabet soup of new credit facilities designed to provide liquidity to financial institutions and markets. The Fed aggressively lowered interest rates during 2008, adopting a zero-interest-rate policy by year’s end" (Princeton University). |
"One question that we often ask is, 'Who is the J.P. Morgan of today?' Is it Warren Buffet, some would say yes, but the world is now larger and more complex, where there is not one single actor. But we do have the legacy of a central bank, a federal institution that...provides a balance when systems can get out of whack, similar to what J.P. Morgan did individually" (Carr). |
(Photo Courtesy of Conservapedia)
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