Topic: The Great Recession.
The great recession in the U.S began at the last quarter of the year 2007 and went on to around mid-2009. It went on to become the worst recession since 1930, leading to enormous wealth loss and later major cutbacks in consumer spending. This lack of spending from the consumers meant less revenue for businesses thus massive loss of jobs to reduce the loss to the business. This loss of jobs further meant that the percentage of poverty rose across the country. The recession spread across the world even leading to financial ruins in some countries. The recession meant that the average GDP dropped significantly. Major mortgage providers declared bankruptcy and banks started to close down. But what led to this?
The unethical decisions made by most banks greatly impacted and fuelled the great recession. Although these decisions made were not illegal, they caused a lot of damages to those who did not know what they had gotten into. Negative spending rate meant that instead of saving money every year, Americans went deeper into debt. This meant they had to keep borrowing and would finally run out of that capability to borrow and the ability to pay back borrowed loans. This would mean that banks had to take away part of their wealth to compensate for the debts. Banks offered mortgages to borrowers who could not afford them. Then they would inc…
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