The Issue: Recession 2008
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THE ISSUEIn 2005, the personal savings rate in America hit a post Great Depression low of negative .5% - people were spending more than they were earning. These reduced savings rates were offset at the time by increasing real estate values and a growing national deficit of more than $9 trillion, which was temporarily propped up by lending from foreign nations. Low ‘teaser’ mortgage rates lured Americans to buy homes that would eventually reset at higher payment values. Financial experts in Wall Street bought up and packaged these ‘subprime’ mortgage backed securities and distributed them worldwide, as a fail-safe means for investment. All the while, America’s manufacturing base was being decimated, losing more than 3 million jobs since 2000. The industrial sector, along with many others, were rendered unable to compete in the world through faulty trade agreements that closed down factories, off-shored entire industries and put Americans into service jobs with lower pay and poorer benefits. Then the housing bubble burst and home prices, which had for so long offset wealth stagnation and reduced savings in the American middle class, started to plummet. Citizens that had taken subprime loans saw their rates reset to higher amounts and started to default on their mortgage payments. As a result, an estimated 2 million Americans were in danger of losing their homes. The rise in foreclosures sent banks and financial institutions- such as Bear Stearns- that had bet on the now ‘toxic’ loans to suffer catastrophic losses in capital. Foreign investors that had already been stockpiling dollars as a reserve currency begin to ‘unload’ the greenback due to its declining worth by buying up more and more American companies, diverting U.S. innovation, profits and key ownership positions abroad. EIC POSITION"The recession is symptomatic of the great economic challenges that face America today. Homes values are plunging, wages are stagnating, debts are rising, good jobs declining, the dollars worth is dropping….We must pressure our government to effectively deal with these challenges immediately or else our children will be forced to deal with them tomorrow.” WHAT YOU CAN DO RIGHT NOW
• Join a discussion group via Meetup.com to find people in your area to talk about this and other issues with. • Help U.S. companies recover by taking the time to buy American made goods. A list of these websites can be found on the main page of EconomyInCrisis.org. • Help us raise the funds necessary to disperse this information through mass media outlets across the country. REFERENCES
Negative personal savings rate: What does it mean?
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LIST OF RELATED ARTICLES
Double Dip Recession Looming?Sunday, August 30, 2009
Nouriel Roubini discussed the very real concern that this recession could be a “double dip.”
U.S. Economy Suffering, China SoaringSaturday, August 15, 2009
Some in the U.S. government may declare an end to the recession by late 2009 or early 2010, but the economy will not begin to rebuild itself until long after. China is currently crafting a robust recovery.
This Recession Isn't Over by a Long ShotWednesday, August 05, 2009
The “happy talk” campaign in the US media and coming from the White House is just that: Happy Talk.
White House Cautiously Optimistic on EconomyMonday, August 03, 2009
While officials actively tried to paint a rosier picture of the economy, they acknowledged that a full recovery would be a long and painful process.
Bankrupt: America's Brand NamesWednesday, July 08, 2009
Some of the biggest companies in their fields have gone bankrupt, including Obama's suitmaker and an amusement park.
College Grads Face Grim Employment ProspectsTuesday, May 19, 2009
Today’s college graduates are not only burdened with mountains and mountains of debt before entering the real world, but now they are also faced with the prospects of gaining employment in the worst job market since the Great Depression.
Post Office May Cut Down Service to 5 Days a WeekTuesday, May 12, 2009
“It is possible that the cost of six-day delivery may simply prove to be unaffordable," said Postmaster General John E. Potter.
Small Business Horror StoriesTuesday, May 12, 2009
Despite making drastic cutbacks and incentives, small businesses are still feeling the pinch of the worst economy since the Great Depression.
Reader Comment of the WeekFriday, February 27, 2009
The primary reason we got into this mess is that we borrowed money from overseas to import products rather than producing the products ourselves.
Facilitating a Downward SpiralWednesday, February 25, 2009
The U.S. will not be able to pull the economy out of a recession as we have done in the past if America does not drastically change its trade policies that fill the coffers of foreign competitors, incite the liquidation of our best companies and encourage outsourcing.
California in Unchartered WatersTuesday, February 17, 2009
“No other state is in the kind of crisis that California is in,” Iris J. Lav, the deputy director of the Center on Budget and Policy Priorities told The New York Times.
Beige Book Reports Dire Economic ConditionThursday, January 15, 2009
“Most districts noted reduced or low activity across a wide range of industries,” the Fed said Wednesday in its report. “Overall economic activity continued to weaken across almost all” regions.
Dr. Doom: Even our Recovery Will Feel like a RecessionSunday, January 04, 2009
Dr. Roubini predicts that any recovery will be put off until 2010 or 2011 at the earliest, and when it does come it will still feel like a recession to most of us.
Worst Job Market in Quarter of a CenturyTuesday, December 23, 2008
According to the report the U.S. will likely shed another one million jobs in 2009, no matter what President-elect Barack Obama does as far as creating a stimulus package with job creating initiatives.
Obama's Questionable Stimulus PlanMonday, December 22, 2008
$700 billion in stimulus money, may not be enough to breath life back into the economy.
Poll Shows Widespread Fear and UncertaintyWednesday, December 17, 2008
Almost nine of 10 respondents said they were worried about deficit spending. Most respondents - 82 percent - believe the country is on the wrong track economically and 54 percent say it is full-blown crisis mode.
States Desperate For FundsThursday, December 11, 2008
Governors could be the next executives on Capitol Hill holding out the tin cup.
China Trashes U.S.Monday, December 08, 2008
Worldwide economic downturn has severely decreased China’s demand for recyclable products from the U.S., bringing the industry to a near standstill.
Lowering Mortgage Rates Not Enough To Stabilize Housing MarketFriday, December 05, 2008
The Treasury Department is considering a plan to lower mortgage rates to 4.5 percent on 30-year fixed-rate mortgages, however, experts are skeptical that the plan would spur buying.
12,000 Jobs on the Chopping Block at AT&TThursday, December 04, 2008
AT&T Inc., the largest telephone service provider in the U.S., announced on Thursday that it plans to slash 12,000 jobs in a cost-cutting measure. The job cuts represent roughly four percent of the company’s workforce. |
