Fixing the Economy
By Kimberly Amadeo, About.com Guide to US Economy
What caused the 2008 credit and banking crisis, which caused the current recession, and what the government has been doing to fix it.
Subprime Mortgage Crisis
In 2006, the subprime mortgage crisis began, but experts said it would be restricted to the U.S. housing industry.
- How Real Estate Affects the U.S. Economy
- Understanding the Subprime Mortgage Crisis
- Causes of the Subprime Mortgage Crisis
- Fannie Mae, Freddie Mac and the Subprime Mortgage Crisis
- Did Fannie and Freddie Cause the Mortgage Crisis?
- How the Mortgage Crisis Led to the Banking Crisis
Banking Crisis
By August 2007, the Federal Reserve realized that banks were slowing down in lending. It began expansive monetary policies to add liquidity to the economy. What it didn't realize, though, was that the problem was one of credibility, since the banks had stopped lending because they didn't trust each other.
- Aug 07 - Federal Reserve Bailout Begins
- Mar 08 - Fed Bails Out Bear Stearns
- Sep 08 - Lehman Brothers Goes Bankrupt
- Feds Nationalize Fannie Mae and Freddie Mac
- Fed Buys AIG
- Money Markets Freeze Up
- Oct 08 - $700 Billion Bailout Bill
- Bailout of Credit Card Market
- Nov 08 - Citigroup Bailout
- A Summary of Federal Intervention in the Banking Crisis
Current U.S. Recession
By Q4 2007, the U.S. GDP growth rate had turned negative. The U.S. was in a recession, but experts didn't realize it until Q3 2008, when growth turned negative again.
- What Is a Recession?
- What is the Ideal GDP Growth Rate?
- Unemployment
- What Caused this Recession?
- Could a Stock Market Crash Causes a Recession?
- Is Gold a Good Hedge Against a Stock Market Decline?
- Recession or Depression?
- Why the U.S. Is not Headed Towards the Second Great Depression
- Why the U.S. Recession is not Like Japan's Recession
Obama's Economic Stimulus
Even before he took office, Barack Obama had a well-formulated plan to fix the economy. As time goes on, he and his team will be challenged to creatively address one of the worst economic crises in modern times.
- Obama's Economic Platform
- Obama's Economic Stimulus Plan
- Obama Plan to Create 3 Million Jobs by 2011
- How an Obama Win Affects the Economy
- Obama's Economic Team
Important Terms
The cause of the meltdown was deregulation of derivatives that were so complicated that even their originators didn't understand them. Find out what they are, how they work, and how they will continue to muck up the economy for years to come.
- Liquidity
- Mark-to-Market
- Mortgage-Backed Securities
- Preferred Stock
- Secondary Mortgage Market
- Subprime Mortgages
Other Economic Crises
The U.S. economy has suffered from many other economic crises. This gives us hope, because we learned more about how the economy works and became smarter about managing it. Without that knowledge, we would be in much worse shape today.
- Long Term Capital Management - 1997
- Savings and Loan Crisis - 1987
- Is the Current Crisis Like the S&L Crisis?
- Great Depression of 1929
- Is the U.S. Headed Towards the Second Great Depression?
- Why the U.S. Is not Headed for a Japan-Style Recession
- Iceland Goes Bankrupt - Is the U.S. Next?
Federal Toolbox
TAARP, TALF, TAF - The Federal Government has created a whole new list of tools to fix the economy. Find out what they are and how they work.
