The Economic Crisis of U.S in 2008

I) Introduction.

"There are more than 26 million who are out of work, cannot find full-time work, or have given up looking for work. About four million families have lost their homes to foreclosure and another four and a half million have slipped into the foreclosure process or are seriously behind on their mortgage payments. Nearly 11 trillion in household wealth has vanished, with retirement accounts and life savings swept away. Businesses, large and small, have felt the sting of a deep recession. There is much anger about what has transpired, and justifiably so. Many people who abided by all the rules now find themselves out of work and uncertain about their future prospects." When reading this information, you may think it may be the status of a certain poor country. The particularly serious numbers show that country is experiencing many problems. I will tell you a secret that you can not have more surprise. The above information is situation of the country that has a most powerful economy all over the world. That is United State of America. The year 2008 marked the economic crisis which caused the USA severe damages. Many of the US financial institutions have suffered heavy losses due to the effect of this crisis. In addition, the crisis is increasingly spreading to the economies of some countries in Europe and in Japan... As a result, some powerful banks in these countries are also suffering from the impact of the crisis. The consequences of the crisis are not only observed in the dimensions of business operation and the economic growth rate and employment rate in the US, but also taken into consideration on the global impact on the shift of international investment capital flow in particular and the world's economic growth in general. Therefore, it is really necessary to find out what creates this crisis in order to help other countries avoid it. My essay will provide the causes and describe some America's policies to counteract the crisis. I also suggest some ideas for Vietnam government. My essay has information from reliable sources so that I hope it will be helpful for you.

II) Analysis.

A) Causes of economic crisis 2008.

The economic crisis of America in 2008 was caused by combination of housing bubble and credit bubble. 3 parts below will explain more about that.

1) Loose monetary policy and formation of housing bubble.

Period of former President Bill Clinton (1992 - 2000), which is considered as heyday of the U.S., has technological progress, economic efficiency, budget surplus, and low foreign debt exchange. However, at the end of this period there was one notable event which was rupture of the dotcom bubble. This affected the wealth of the middle class of America. It reduced the likelihood of collateral for loans to invest