Recession of 2008. We Came Close to Breaking
by Shows how weak our economy was and how fragile it was.
In 2008 our Economy Almost Failed
In 2008, our economy, thriving, in our expansion, had everything going its way. everyone was making money. People were getting richer and richer. Then out of the blue, the stock markets started losing cost rapidly. Our economy was to face the biggest recession since the great depression of the 1920’s and 30’s. We had a cycle which was very risky and created a systemic cycle. No one knew what was to come. I’m going to talk about what happened and why, who is to blame, and how lucky we are.
In 2008, our economy just about crashed because banks were giving money to people and families, that couldn’t even afford to do it. More and more homeowners wanted a house so the banks gave them more an more money. Meanwhile, the people selling the homes, got the money and gave it to investment banks which gave them more money in return. Investment banks then sold stocks to people and other private companies. Everything was going perfectly fine until there were no more homeowners buying homes. People couldn’t afford to pay the banks back. Banks needed the money so that forced them to foreclose the home. that made the people selling the homes no money to give to the investment banks on wall st. Investment banks were no longer able to sell stocks. Everything in the economy was freezing up! Banks didn’t loan out money, people couldn’t pay them back and so on… From there on people were seeing the systemic risk in our economy. once Lehman bros. fell it showed people that someone that big could even fail. From there it went downhill.
Who is to blame? We should blame the homeowners that wanted to buy a house even though they didn’t have enough money to pay the banks back.
We are really lucky that our economy didn’t fail. if it did our country would’ve fell apart.
Liked it
