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The '''Financial Crisis of 2008''' is an ongoing worldwide financial crisis that is the worst the world has seen since 1933 with the [[Great Depression]]. Drastic measures to confront seemingly insurmountable financial calamity resulted in the creation of '''TARP''' (Troubled Assets Relief Program), $700 billion safety [[appropriated]] by the U.S. Congress.  The National Bureau of Economic Research<ref>NBER is a private organization that follows its own standards as set by eminent economists such as [[Milton Friedman]]; its dating of business cycles is widely accepted by conservatives.</ref> has identified the peak of the last boom cycle in December 2007; the U.S. economy has been in decline ever since.<ref>See "Text of the NBER's statement on the recession and FAQ's" [http://www.usatoday.com/money/economy/2008-12-01-recession-nber-statement_N.htm ''USA Today'' Dec 1, 2008]. "The U.S. economy entered a recession in December 2007, a committee of economists at the private National Bureau of Economic Research said," at [http://www.marketwatch.com/news/story/US-recession-began-December-2007/story.aspx?guid={7DCF90E4-D61A-4014-83CE-45E938CD632C} Rex Nutting] - MarketWatch</ref>  [[Image:CRASH08.JPG|thumb|330px|Oct 11, 2008 editorial; cartoon by Horsey stresses the global collapse]]  The crisis has caused the [[Recession of 2008]], which reached bottom in summer 2009, causing a worldwide economic decline that is the most severe since the 1930s. As of 2013, there still are 4 million few jobs in the U.S. than in 2008 - despite $5 trillion in federal [[stimulus]] spending.   

The '''Financial Crisis of 2008''' is an ongoing worldwide financial crisis that is the worst the world has seen since 1933 with the [[Great Depression]]. Drastic measures to confront seemingly insurmountable financial calamity resulted in the creation of '''TARP''' (Troubled Assets Relief Program), $700 billion safety net [[appropriation|appropriated]] by the U.S. Congress.  The National Bureau of Economic Research<ref>NBER is a private organization that follows its own standards as set by eminent economists such as [[Milton Friedman]]; its dating of business cycles is widely accepted by conservatives.</ref> has identified the peak of the last boom cycle in December 2007; the U.S. economy has been in decline ever since.<ref>See "Text of the NBER's statement on the recession and FAQ's" [http://www.usatoday.com/money/economy/2008-12-01-recession-nber-statement_N.htm ''USA Today'' Dec 1, 2008]. "The U.S. economy entered a recession in December 2007, a committee of economists at the private National Bureau of Economic Research said," at [http://www.marketwatch.com/news/story/US-recession-began-December-2007/story.aspx?guid={7DCF90E4-D61A-4014-83CE-45E938CD632C} Rex Nutting] - MarketWatch</ref>  [[Image:CRASH08.JPG|thumb|330px|Oct 11, 2008 editorial; cartoon by Horsey stresses the global collapse]]  The crisis has caused the [[Recession of 2008]], which reached bottom in summer 2009, causing a worldwide economic decline that is the most severe since the 1930s. As of 2013, there are still 4 million fewer jobs in the U.S. than in 2008 - despite $5 trillion in federal [[stimulus]] spending.   

Some [[free market]] advocates believe Congress and the [[Federal Reserve]] should not have bailed out failing firms and instead should have allowed market mechanism to operate (free market advocates assert successful should be rewarded for doing things right, and failing businesses should be allowed to perish for making mistakes and not providing the public with the things they need and are in demand; government intervention can drag out recessions and depressions).<ref>http://www.youtube.com/watch?v=zzTXaAXusiI</ref><ref>http://www.youtube.com/watch?v=czcUmnsprQI</ref>  A 2005 study found that government corporate bailouts are often done for mere political considerations and the economic resources allocated exhibit significantly worse economic performance than resources allocated using purely business considerations.<ref>http://papers.ssrn.com/sol3/papers.cfm?abstract_id=676905</ref>

Some [[free market]] advocates believe Congress and the [[Federal Reserve]] should not have bailed out failing firms and instead should have allowed market mechanism to operate (free market advocates assert successful should be rewarded for doing things right, and failing businesses should be allowed to perish for making mistakes and not providing the public with the things they need and are in demand; government intervention can drag out recessions and depressions).<ref>http://www.youtube.com/watch?v=zzTXaAXusiI</ref><ref>http://www.youtube.com/watch?v=czcUmnsprQI</ref>  A 2005 study found that government corporate bailouts are often done for mere political considerations and the economic resources allocated exhibit significantly worse economic performance than resources allocated using purely business considerations.<ref>http://papers.ssrn.com/sol3/papers.cfm?abstract_id=676905</ref>

The [[International Monetary Fund]] (IMF) calculates that the global financial crisis will produce $3.4 trillion in losses for financial institutions around the world between 2007 and 2010.<ref> Peter Dattels and Laura Kodres, "Global Financial System Shows Signs of Recovery, IMF Says," [http://www.imf.org/external/pubs/ft/survey/so/2009/RES093009A.htm ''IMF Survey Magazine'' Sept. 30, 2009]</ref> World [[GDP]] in 2007 was approximately $70 trillion, so the immediate decline in the economic output of the planet was about 5%.

The [[International Monetary Fund]] (IMF) calculated that the global financial crisis would produce $3.4 trillion in losses for financial institutions around the world by 2010.<ref> Peter Dattels and Laura Kodres, "Global Financial System Shows Signs of Recovery, IMF Says," [http://www.imf.org/external/pubs/ft/survey/so/2009/RES093009A.htm ''IMF Survey Magazine'' Sept. 30, 2009]</ref> World [[GDP]] in 2007 was approximately $70 trillion, so the immediate decline in the economic output of the planet was about 5%.

==Overview==

==Overview==

Negative economic news has spread outward from financial institutions to depress housing, construction, office buildings, automobiles, retail sales, state and local government, and vitually every other sector of the economy. Consumer spending has plunged, and banks have been very reluctant to loan money. Major banks and corporations have gone bankrupt.  

Negative economic news has spread outward from financial institutions to depress housing, construction, office buildings, automobiles, retail sales, state and local government, and virtually every other sector of the economy. Consumer spending plunged, and banks were very reluctant to loan money. Major banks and corporations have gone bankrupt.  

The recession is worldwide.  In recent months governments across the world have spent huge sums of money to reverse the crisis, but thus far the results have been inconclusive and the declines continue. The U.S. government provided cash bailouts of several hundred billion dollars and long-term loan guarantees of over $7 trillion dollars (compared to a GDP of $15 trillion a year in the U.S.).  Conservatives have been as dismayed and baffled by the crisis as everyone else.  Rush Limbaugh, for example, blames Obama.

The recession is worldwide.  Initially governments across the world have borrowed and spent huge sums of money to reverse the crisis, but the results were inconclusive and anaemic while the declines continued.<ref>By 2013, the notion of a Keynesian stimulus had been abandoned by the the European Union, which cut it's budget in real terms, and the United States which invoke a [[sequestration]] of federal mandated spending to reduce the baseline for future years. While the prospect of deflation ordinarily would be real, the Federal Reserve has vastly increased the [[money supply]] both domestically and abroad with lending to foreign [[Central bank]]s. Although the U.S. monetary base aggregates are four times larger than in mid 2007, federal spending is 50% more than in 2008, and  the accumulated [[national debt]] one-third greater, U.S. [[GDP]] output still lags and workforce is the size (134 million workers) as it was in 2003 - despite population having grown by 24 million people.</ref>  The U.S. government provided cash bailouts of several hundred billion dollars and long-term loan guarantees of over $7 trillion dollars (compared to a GDP of $14.6 trillion in 2008).   

Unlike crises in the mid 1970s and early 1980s, this one began in the financial sector with devastating effects on many very large financial companies worldwide, especially in September 2008.  The negative effects by October 2008 began spreading to all other sectors of the economy, and forecasts for the next year show little likely of a quick recovery anywhere. For the effects on the broader economy (outside of finance and autos) see [[Recession of 2008]].

Unlike crises in the mid 1970s and early 1980s, this one began in the financial sector with devastating effects on many very large financial companies worldwide, especially in September 2008.  The negative effects by October 2008 began spreading to all other sectors of the economy, and forecasts for the next year show little likely of a quick recovery anywhere. For the effects on the broader economy (outside of finance and autos) see [[Recession of 2008]].