The Great Recession, a phenomenon that left millions of Americans in debt back in 2008. Stock markets crashed, mortgage values declined, and basically the whole entire United States economy spiraled downhill. There are many theories of how all of the small factors came together to put the economy in a downfall. Everyone has their own theories of what lead up to the economic decline, many in which could be right or wrong.
Lets start off with Bill Clinton. Clinton was a democratic president that was known as being an extraordinary president. The democratic population loved him. During his presidency, the United States economy was at its finest. The working rate in the United States skyrocketed, there were many people that had jobs, and also not as many people in debt during his presidency. Overall, Bill Clinton was an excellent president.
On the other hand, there were a couple of actions that Bill Clinton took during his presidency that may have weakened the United States economy in the long run. Bill Clinton had signed several “Acts” that may have negatively impacted the United States economy in the long run. In 1995, Clinton unlatched housing rules by revising the Community Reinvestment Act, which put added pressure on banks to lend money in low-income neighborhoods. Overall, the Community Reinvestment Act was probably one of the earliest Act that was signed that had an impact on the future United States economy.
In 2008, the starting point of the economic downfall, banks and mortgage values plummeted. All of a sudden the price of homes started to go down due to overgrowth in construction of homes. If banks had not been pressured to loan out loads and loads of money, the land developers may have not had enough funds to build as much as they were building. Building is not a bad thing. Overall, expansion in the United States is great, and in the long term provides housing for those who will live in the United States in the future.
There were so many homes being build that they could not be sold anymore due to supply and demand. There was so much supply on homes that the demand just went down because everyone could buy their homes. Prices of homes collapsed because the home developers just kept building, building, and building into infinity. They started building way too much, knowing that they really wouldn’t be able to sell them. This is exactly why the prices went down. Everyone could afford the homes they wanted to buy because the prices were so low. Therefore, the people who developed the land had to sell the homes for prices much cheaper than expected.
All of a sudden, people that had invested money into homes and retail couldn’t pay off their loans. They had planned on getting all of this money from buying and selling properties that they ended up not getting. Overall, the very start of the economic decline started off with bank loans.
The Great Recession of 2008, in Clinton’s point of view, the contract probably looked very good and looked like it was in the best interest for the United States. For the short-term well being in the country, the contract was great. Everyone was getting loaned money that could be put towards housing, transportation, and other expenses. The situation seemed great. The economy had a good flow, many people had jobs, and not many people were in debt. Anyways, what was overlooked was the long term effects that this may have impacted for the future.
In my opinion, this is where the economy decline started. Even though the economy was starting to get better during his presidency, the long-term effects were awful. Banks started to abuse this power by loaning money to so many unreliable people, and then started getting involved in insurance and mortgages.
George W. Bush was elected in the year 2000, in my opinion; he starts abusing the power of the National Guard. The “weekend warriors”, those who signed up expected only a couple weeks a year…