Block, SkipCaptcha
356
edits
Changes
Jump to navigation
Jump to search
Line 11:
Line 11: + +
→Origins
==Origins==
==Origins==
The recession began in January 2008 in the financial sector as major banks in the U.S. and Europe got into serious trouble by investing in bad mortgages. The crisis spread globally due to the fact that many banks and other business worldwide had invested in these securitized debts. Trouble spread to the [[automobile]] industry, where General Motors and Chrysler went bankrupt in spring 2009, due to a decrease in US consumer demand. They remained solvent by an emergency loan proposed by President [[George W. Bush]] over the objections of Congressional [[Republican Party|Republicans]]. Later a [[bailout]] involving a taxpayer buy out and bankruptcy reorganization was authorized by President [[Barack Obama]] and Congressional [[Democrat]]s.
The recession began in January 2008 in the financial sector as major banks in the U.S. and Europe got into serious trouble by investing in bad mortgages. The crisis spread globally due to the fact that many banks and other business worldwide had invested in these securitized debts. Trouble spread to the [[automobile]] industry, where General Motors and Chrysler went bankrupt in spring 2009, due to a decrease in US consumer demand. They remained solvent by an emergency loan proposed by President [[George W. Bush]] over the objections of Congressional [[Republican Party|Republicans]]. Later a [[bailout]] involving a taxpayer buy out and bankruptcy reorganization was authorized by President [[Barack Obama]] and Congressional [[Democrat]]s.
[[Leftist]]s have incorrectly attributed the cause of the recession to Bush Administration policies, calling it the "Bush Recession." However, many people recognize that it is Obama's failed policies and inaction that extended the recession and have prevented a full recovery. Indeed, a [[Google]] search of "Obama Recession" returns 273,000 hits, whereas the phrase "Bush Recession" returns only 126,000 hits as of August 14, 2011.
In the U.S. GDP fell in the fourth quarter of 2008 (October-November-December), by 6.2% annual rate, with declines heaviest in business investment, exports, finance, autos, housing, construction, and retail sales.<ref>Three of the four engines of economic growth -- consumer spending, business investment and exports -- declined sharply. Consumer spending fell at an annualized rate of 4.3%; business investment in equipment and software sank at an astonishing annual rate of 29%; exports of goods and services plunged 24%. ''Washington Post'' Feb. 28, 2009 </ref> The steep decline continued; GDP in the first quarter of 2009 (January-February-March) fell at the annualized rate of 6.1%, much worse than expected. American business slashed capital investment at an annual rate of -38%. Investment in software and computer equipment declined by an annualized 33.8%, and investment in new buildings was down 44.2%. On the slightly optimistic side, financial markets that spiralled out of control late last year are stabilizing, and declines in retail sales and orders by manufacturers are no longer posting record declines.<ref>An "annualized rate" is four times the actual quarterly rate. Jack Healy, "U.S. Economy in 2nd Straight Quarter of Steep Decline," [http://www.nytimes.com/2009/04/30/business/economy/30econ.html?_r=1&hp ''New York Times'' April 29, 2009]</ref>
In the U.S. GDP fell in the fourth quarter of 2008 (October-November-December), by 6.2% annual rate, with declines heaviest in business investment, exports, finance, autos, housing, construction, and retail sales.<ref>Three of the four engines of economic growth -- consumer spending, business investment and exports -- declined sharply. Consumer spending fell at an annualized rate of 4.3%; business investment in equipment and software sank at an astonishing annual rate of 29%; exports of goods and services plunged 24%. ''Washington Post'' Feb. 28, 2009 </ref> The steep decline continued; GDP in the first quarter of 2009 (January-February-March) fell at the annualized rate of 6.1%, much worse than expected. American business slashed capital investment at an annual rate of -38%. Investment in software and computer equipment declined by an annualized 33.8%, and investment in new buildings was down 44.2%. On the slightly optimistic side, financial markets that spiralled out of control late last year are stabilizing, and declines in retail sales and orders by manufacturers are no longer posting record declines.<ref>An "annualized rate" is four times the actual quarterly rate. Jack Healy, "U.S. Economy in 2nd Straight Quarter of Steep Decline," [http://www.nytimes.com/2009/04/30/business/economy/30econ.html?_r=1&hp ''New York Times'' April 29, 2009]</ref>