2008 Financial Crisis Analysis

In the U.S., persistent high unemployment remained as of December 2012, along with low consumer confidence, the continuing decline in home values and increase in foreclosures and personal bankruptcies, an increasing federal debt, inflation, and rising petroleum and food prices. A 2011 poll found that more than half of all Americans thought that the U.S. was still in recession or even depression, although economic data showed a historically modest recovery.
The financial crisis of 2008 was one of the worst financial events that has taken place in this country in its short history. It was caused by a faulty housing market which was being artificially fueled by the government and risky business ventures. The precipitating factor was a high default
Since the creation in 1942, CED has aimed to promote policies that foster economic growth and development to benefit all Americans. They release an annual report to bring attention to the current issues that are pressing the country such as health care, education, enhance corporate governance and the overall fiscal health of the United States. In 2007, there report called for increased oversight into the financial sector. In the report it says “Many of CED’s Trustees have been concerned about an increasingly short-term focus by many company leaders that is damaging the ability of public companies to achieve greater long-term performance. This trend undermines growth in the American economy.” Congress had to be aware of the risky business practices that were taking place and had received the report stating this. Instead of passing laws that would effectively cut this risky behavior, they passed a law that would protect creditors while creating a more hostile environment for debtors. They passed the Bankruptcy Abuse Prevention and Consumer Protection Act, this act was meant to make it harder for consumers to file Chapter 7 bankruptcy which debts
Instead of creating laws and practices that would punish the financial institutions for their risky gambles they are rewarded with TARP. The Troubled Asset Relief program was a program signed into law by George W. Bush in 2008. TARP allows the Treasury to purchase/ insure up to 700 billions of troubled assets. They are defined as (A) residential or commercial obligations will be bought, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before March 14, 2008, the purchase of which the Secretary determines promotes financial market stability; and (B) any other financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of