The Great Recession and Great Depression

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Economic History on the United States
Section 1
* The Great Recession and Great Depression
The difference between the Great Recession and the Great Depression is that with the Great Recession, also recognized as the 2008 Recession, has been linked to the subprime mortgage disaster in Western Europe and the United States. These Subprime Mortgages are known as homes that have been given to borrowers who have a history of poor credit. Their home loans are acknowledged as high-risk loans. The Great Depression, in contrast, was an economic depression that rocked the world severely in the 1930s. The industrialized world suffered an economic downtown in history, and it lasted from 1929 to 1939, starting in the United States (Week 9: Great Depression and New Deal). The Great Depression started after a stock market took a crash in October 1929, which had the Wall Street fright, thus wiping out millions of stakeholders (Week 9: Great Depression and New Deal). The similarities between the 2001 Recession and the Great Depression was that both of them were resections on business investments that followed periods of excessive investment. However, many people do not believe that the economy is intended for sustained hardships economically, as witnessed in the era of the Great Depression due to the downturn faced by the stock market.
The Great Recession was an era of universal drop perceived in the national economies globally that happened between the years 2007 and 2009 (Week 9: Great Depression and New Deal). The timing and scale of the Recession were diverse from nation to nation. The credit crunch of the years 2007 and 2008 was the leading cause of the Great Recession, which caused the globe's banking system to run or become short of funds. The result of this was a lack of trust, especially on banks having the confidence to lend people money. Several complicating reasons caused the credit crunch. Firstly, the United States banks were involved in a massive upsurge in sub-prime mortgage credits in 2000-2007. The mortgages were risky though a better deal was presented on illogical exuberance and certainty that houses' prices would keep on increasing. Secondly, the United States mortgage companies engaged in selling these unsafe mortgage packages to several banks across the globe (Week 15: The Obama Years). The agencies related to credit rating ratted them AAA despite the reality of the riskiness of these bundles. Thirdly, around the start of 2005, the interest rates in America went up, and consequently, the homeowners in America started evading payment on these uncertain mortgages. Fourthly, a lot of money was lost within the banking sector of American banks.
Still, then again, the other banks globally later realized the ‘safe’ mortgage packages that they purchased were impractical. Therefore, several banks globally witnessed a considerable decrease in the value and liquidity of their resources. The Great Recession occurred in the year between 2007 and 2009, and in this period, countries experienced a national economic decline (Heilbroner and Singer). This was declared by the international monetary fund as the most severe decline economically and financially. The blend of susceptibilities...