Current Economic Crisis



A political satire of how the US government dealt with the 2008 crisis.
A political satire of how the US government dealt with the 2008 crisis.

Key Points:


  1. The September 2008 recession was a severe global economic problem that began in December 2007 and took a particularly sharp downward turn in September of 2008.
  2. It was caused mainly because of the failure of American banks which was intern caused by loans to individuals who could not pay back the money with interest.[1]
  3. It consisted of persistent and high unemployment, low consumer confidence, the decline in home values and increase in number of foreclosures and personal bankruptcies, an escalating federal debt crisis particularly for the USA, high inflation, and rising gas and food prices.
  4. Fortune 500 companies and wealthy (billionaires) were the least affected, recovering quickly and even receiving a government bailout
  5. The price of oil jumped past $100 a barrel in January of 2008
  6. In mid-2008 the European Union confirmed that the EU was strongly resisting the US pressure to increase European budget deficitsin order to stabilize the economy.

Relationship to Liberal Economics

President elect Barrack Obama and some of the motos which his campaign was run on.(3)
President elect Barrack Obama and some of the motos which his campaign was run on.(3)


While the era of increased globalization during the 1990’s and up to 2008 reflected a swing towards laissez-faire and classical liberalist economic policies, the election of Barrack Obama changed all that. The credit and mortgage crisis of 2008 called these policies into question and a shift towards a welfare state was imminent. The worldwide elation at these election results shows that many individuals believe that government does indeed have an important role in promoting modern liberalist economic policies within their borders [2].

References:

[1]Polleit, Thorsten (2007-12-13). "Manipulating the Interest Rate: a Recipe for Disaster". Mises Institute. http://mises.org/story/2810. Retrieved 2009-01-04.
[2]Christison, Fielding, Harding, Meston, Smith, Zook, (2009). Perspectives of Ideology (pp. 220) Canada, Ontario: Oxford University Press.
[3] Retreived from http://www.google.com/imgres?start=84&um=1&hl=en&sa=N&biw=1280&bih=855&addh=36&tbm=isch&tbnid=OpGHFHSWTTWFJM:&imgrefurl=http://kakonged.wordpress.com/tag/president-barack-obama/&docid=CPOBrWRPkll-SM&imgurl=http://blog.northstarmanifesto.com/wp-content/uploads/2009/01/shepard-fairey-barack-obama.jpg&w=450&h=336&ei=q7NmT6rGLaXY0QHe-vimCA&zoom=1&iact=rc&dur=85&sig=105277738050061707934&page=4&tbnh=143&tbnw=193&ndsp=26&ved=1t:429,r:9,s:84&tx=78&ty=111 on March 18th, 2012