A Summary Of House Of Debt

House of Debt Student’s Name Institutional Affiliation House of Debt The book “House of Debt: How They (and You) Caused the Great Recession and How We Can Prevent It from Happening,” is a book written by Atif Mian and Amir Sufi. The authors deliver the important happenings of 2009 to early 2010 financial crisis. Further, the book also proposes various solutions that would avert the occurrence of future financial crisis. The book shows how the great recession affected the entire world, the contributing mistakes and suggests a multitude of different possible ways that can help the situation and rebound the economy once again. In the book, Atif Mian and Amir Sufi posit that mortgage debt was the primary source of the financial crisis. They further note that the government did not emphasize on household debt but rather only tried to help the financial institutions and banks thus worsening the crises. The crisis and ineffective government intervention resulted in the lower expenditure by households, crippled the overall demand, and consequently led to a widespread reduction of production and supply by companies (Mian, & Sufi, 2014). Therefore, most companies run bankrupt and were either downsizing or closing up rendering millions of people jobless. Although the government tried to rescue the situation, by requesting for layoffs and buying the loans, it was already late, affecting the speed to get out of the financial recession. The authors blame the government in their part of drafting and implementing policies that favored the banks in their bid to save banks from bankruptcy. Therefore, policies such as ordering banks to write off the mortgage debt and buying of loans failed due to the fear that it would result into banks ...