America was the most dominate state in the universe when it came to merchandise and goods produced. We even helped the states that could non back up themselves ( Economy, 2009 ) . Our economic system since so has changed dramatically over the last 80 old ages, and has been at steady diminution since the twelvemonth 1929. After the Great Depression, the economic system has bounced back several times before, but once more is in a changeless free autumn and is on a slow recovery this clip.
Many thoughts on how our economic system has gotten on this steady diminution, but who has the right theory, who is to fault? Should we fault the Bush disposal for allowing the war go on for every bit long as it has? The reply to this is no, economic experts do non believe that it is the true and entire cause for the diminution. In add-on to funding the war and the moving of major concerns overseas to counterbalance for the cost of fabricating certain goods, economic experts say that we besides have to factor in the stock market clang that has besides helped in doing this diminution go a recession. This recession has taken a major toll on our economic system that has caused concerns to shut and has made the unemployment rate and the foreclosure rate to lift. However, there is hope for us in that our president can and will assist us to organize a route out of this diminution with his budget cuts and stimulation bundles for the citizens and concerns likewise, but it will take clip to make so.
To analyze this farther, we must look at all cardinal facets of what caused this recession closely, get downing with the support of the war in Iraq and Afghanistan. When the war foremost started, we were passing approximately 10 million dollars a month. Since so it has been calculated at 1.8 billion a hebdomad for military and non-military disbursement ( Shoen, 2006 ) . With this sum of money being spent one could easy misidentify this for the cause, but this is non what caused the recession as many people tend to believe. It does lend to the draining of resources from the economic system and does finally increase the trade shortage in a 10 twelvemonth span ( CEPR ) . The root that made this recession is another stock market clang in 2008.
From this graph it is shown how many times our state has been in some kind of recession due to the stock market, it seems the same issue causes it and yet there is no alteration to repair it. Granted this recession is nowhere nigh every bit bad as the depression of 1929, nor will it take as long to acquire out of as it did earlier, but the similarities are amazing. Harmonizing to kypost.com, this stock market clang, and the stock market clang of 1929, is due to people borrowing money from the Bankss to purchase belongingss that they could non afford and when it was clip to pay up they did non hold the money and so went into foreclosure. Kypost.com besides states that the market was flooded with supply and the demand dried up. Banks are now looking for new investors to buy the foreclosed, no equity places to do up for the deficiency of mortgage paybacks. Then comes the fact that no 1 can purchase a place because the market crashed so difficult it has forced many companies into shuting their doors and or traveling the company overseas, doing the unemployment rate go through the roof. If, nevertheless, the company was fortunate plenty to maintain from traveling or near down, a wage rate and benefit decrease is the lone option to maintain their doors open. Those who were doing, state, 30 dollars and hr are cut back to 10 dollars an hr disallows many people to be able to maintain up with their mortgages as they one time did and destine them to foreclosure.
All this seems unsurprisingly familiar to the Great Depression of 1929, and yet the Bankss still have non learned from their old errors. Let us compare the two for a minute. The great depression started with the stock market clang, this recession started with a stock market clang. The Bankss have lent to people who can non afford what they were borrowing for, and when it was clip to pay up they had nil to pay, the same as those who experienced the Great Depression. We are sing the same draw dorsums as those during the great depression had seen, such as the economic system ‘s battle to readapt itself to be back on path, and how the unemployment rate has increased to an all-time high in the last eight old ages. The lone difference between this recession and the great depression is today we no longer hold as many little concerns with the capableness to come up with new advanced innovations to do a net income for our state and goods that will remain in our state. Supporting the little concerns already established in the United States and maintain them here will do for more goods to merchandise ; more goods to merchandise would intend more money traveling toward the state ‘s shortage.
With all this said, we all must understand that President Obama has inherited this muss of an economic system, and trust that he is making his best to repair it. We must besides believe that our president can assist us out of this crisis and back him up when he makes a determination. He has a good set of thoughts of how to assist our economic system out of this recession and beyond what we are used to, but we should non be opposed to every thought he has merely because it seems impossible.
Let us travel over the thoughts our president has for our economic system and state to acquire a good expression at what he has in shop for the US. First, start with the program our president has that will make new lodging plans to assist those who are in foreclosure and those who are heading for foreclosure. This plan will assist proprietors to pay for their places. The following portion of his program goes hand-in-hand with the first, the president has given a certain sum of money as a stimulus bundle for each single province to maintain concerns from closing down and so that each province can get down up new companies wherein new employees will be needed. ( Straw, 2009 ) This will assist cut down the unemployment rate. He besides plans to raise the minimal pay and increase the Earned Income Tax Credit so that full-time employees can do adequate money to assist raise households and live on ( Obama, 2009 ) . Third, our president has made a proposal to travel the military personnel from Iraq to merely Afghanistan that would cut down the 1.8 billion dollar a hebdomad support that is traveling into funding the war. Fourth portion of President Obama ‘s program is that he has besides proposed a 50 billion “ jump-start ” for the economic system wherein there will be a revenue enhancement on inordinate oil companies so that the American people get a one 1000 dollar exigency energy discount to assist pay for energy costs for those who can non afford it. There will besides be what has been called a “ Making Work Pay ” revenue enhancement cut that may extinguish income revenue enhancements for about 10 million Americans. The “ Making Work Pay ” revenue enhancement cut will besides give working Americans $ 500 dollars per individual and $ 1000 dollars to working twosomes ( Obama, 2009 ) . Our president besides believes that amending the NAFTA understanding it will assist in doing our free trading carnival ( Obama, 2009 ) . Sing our trade shortage is 1.3 trillion dollars, amending the NAFTA understanding so that they will non have as much money as earlier will cut back this shortage drastically. However, on a recent visit to Canada, the president commented on this stating that the reform of the NAFTA pact now may compromise the economic growing of our state due to the diminution of universe trade ( Scrota, 2009 ) . This type of “ endorsing out ” makes many Americans and economic experts non O.K. of some of our president ‘s thoughts on how to assist us out of this recession. Again, we have to seek to understand that our president makes determinations that will be productive, non counterproductive, to our state and if he thinks that it will non be productive to our state, it will merely hold to be put on clasp for another clip when it will be the right move for us. Is this non why we put him in a place of power, to do determinations that benefit our state. Economists do non believe that his programs will work due to the fact of they do non cognize, or instead they can non grok, where will he be having the support and money he needs to do many of these programs become a world or how he will be able to maintain them traveling for long periods of clip. To reply the inquiry of how he will be having money for his program, our president has asked lawgivers for an extra $ 500 billion dollars to kick get down his personal stimulation bundle program to hike production here in the United States for the interest of constructing our economic system. This does non include the $ 700 billion he asked for to assist the car shapers like Chrysler and GMC to maintain the company ‘s doors unfastened and employees hired. If lawgivers do make up one’s mind to allow President Obama his petition for $ 500 billion more dollars, the money will be used this clip to back up the personal stimulation bundle, get down energy enterprises and do revenue enhancement cuts every bit good ( Sahadi, 2008 ) .
At any rate, even with the grounds stacked against our president, I see him drawing us out of this recession by doing new lodging plans, giving concerns revenue enhancement cuts and making stimulus programs so they do non hold to put off any more workers and can remain in concern. If we give our President the clip he needs to finish his undertaking plans one at a clip, we will get down to see the advancement and be able to appreciate the fact that he is non hotfooting into any of his determinations on how to repair these state of affairss more. President Obama said it absolutely in his credence address for going our 44th President, The route in front will be long. Our ascent will be steep. We may non acquire at that place in one twelvemonth or even one term, but America – I have ne’er been more hopeful than I am tonight that we will acquire at that place. I promise you – we as a people will acquire at that place.
There will be reverses and false starts. There are many who will non hold with every determination or policy I make as President, and we know that authorities can non work out every job. But I will ever be honest with you about the challenges we face. I will listen to you, particularly when we disagree. And above all, I will inquire you fall in in the work of refashioning this state the lone manner it has been done in America for two-hundred and twenty-one old ages – block by block, brick by brick, calloused manus by thickened manus ( Obama, 2009 ) .
So make non worry or fuss that our economic system will ne’er mount out of this recession, there is hope for us yet.
Mentions:
? – Obama, Barack. November 4, 2008. Obama Victory Speech Text. The Huffington Post.
Sarota, David. February 12, 2009. On a Canada Trip, Obama floats a damaged NAFTA Canard. The Huffington Post.
Internet Mentions
Straw, Will. January 23, 2009. Synergistic Map: Recovery Beyond the Beltway. Center for American advancement. hypertext transfer protocol: //www.americanprogress.org/issues/2009/01/house_stimulus_overview.html
September 9, 2008. Comment: How did we acquire here? Kypost.com
Obama, Barack. Forming for America hypertext transfer protocol: //www.barackobama.com/index.php? splash=false
Sahadi, Jeanne. December 8, 2008. CNN.com. $ 1 Trillion Rescue: Not That Far Fetched.
Picture Mentions:
Straw, Will. January 23, 2009. Synergistic Map: Recovery Beyond the Beltway. Center for American advancement. hypertext transfer protocol: //www.americanprogress.org/issues/2009/01/house_stimulus_overview.html
Ritholtz, Barry. February 23, 2009. Bear Market Comparison. The Large image.
