The Great Recession and its Aftermath

1. The Great Recession and its Aftermath By: Brendan Totanes and Ben Perez

2. Great Depression and the Great Recession The Great Depression The Great Recession Lasted for 18 months for the U.S. other countries vary 57 – 0.6% of banks failed (Dec. 2007 May 2009) Caused by real estate bubble bursting Lending money became strongly discouraged, millions are still unemployed, budget cuts to education • Lasted for 10 years for the U.S. other countries vary • 9,096 – 50% of banks failed (Jan. 1930 – Mar. 1933) • Caused by the stock market crash • Effects are inflating the size of the federal government, mass migration, more regulations and people are more frugal and social reforms (New Deal)

3. Unemployment Rate

5. Dow Jones Industrial Average

6. What is the DJIA • It is a stock market index • Consists of 30 large publically owned companies based in the United States • First calculated in May 26, 1896

7. Countries in Recession Countries in brown are experiencing recession

8. Effects on the world • The recession caused civil unrest in some countries in the world • Greece had a massive general strike due to the shutdown of many services such as schools and airports • France, Latvia, Lithuania and several more had protests

9. Effect on the 2008 Election • Somewhat mirrors the election of 1932 • Tax cuts and the war on terror contributed to the recession • The unhappiness with the current administration’s party caused the votes to go to the other political party

10. Economic Stimulus Act • An act by Congress • 2 packages were passed by the Senate and the House of Representatives • It was signed into law on February 13, 2008 by Bush • The law provided tax rebates to low and middle income U.S. taxpayers • $300-$600 for singles who qualify and $600-$1200 for married couples ($3000 minimum yearly income)

11. Economic Stimulus Act Cont. • The act is meant to jumpstart businesses by stimulating business and consumer spending • It also gave tax relief to businesses, allowing companies to expand • The act did increase spending of about 3.5% from a typical family • However, the tax cuts were not balanced with decreased government spending, causing a $500 billion budget deficit

12. American Recovery and Reinvestment Act • Similar to the Economic Stimulus Act of 2008 • It gave out $831 billion in tax rebates and spending in infrastructure, health, education and energy • Signed into law on February 17, 2009 by President Obama • ARRA apparently created 1.6 million jobs every year

13. American Recovery and Reinvestment Act cont. • The Act was meant to balance private spending and public spending • Due to China and other countries buying up business in the U.S. • It is also based on Keynesian macroeconomic theory

14. Provisions for ARRA

15. Spending of Bush vs. Obama

16. Federal debt • What most people don’t know is that the U.S. is in debt with itself • About 37.1% of the debt is owed to domestic investors • 31.7% is owed to the federal government • Only 7.7% of the federal debt is owed to China

20. Bush’s Debt • • Conservatorship (federal takeover) of The Federal National Mortgage Association and The Federal Home Loan Mortgage Corporation • • The Wars in Iraq and Afghanistan • • HERA • • Increased defense and nondefense (homeland security) spending • • Entitlement changes • • The Economic Stimulus Act of 2008 • TARP • EGTRRA • JGTRRA • Bailout of automakers in Detroit (GM, Chrysler)

21. Obama’s Debt • The American Recovery and Reinvestment Act (“stimulus package”) • Increase in mandatory spending on entitlement programs • the Patient Protection and Affordable Care Act of 2010 (“Obamacare”) • Increased defense spending • FY 2009

22. Citation • "The Deficit/Debt Problem & Federal Revenue – Obama vs Bush." Fact and Myth. Fact and Myth, 27 July 2013. Web. 22 May 2014. <http://www.factandmyth.com/deficit-and-debt/obama-vs-bush-deficit-debt-revenue-spending>. • "Adding to the Deficit: Bush vs. Obama." Washington Post. The Washington Post, 01 Feb. 2012. Web. 22 May 2014. <http://www.washingtonpost.com/business/economy/adding-to-the-deficit-bush-vs-obama/2012/01/31/gIQAQ0kFgQ_graphic.html>. • N.p., n.d. Web. 22 May 2014. <http://upload.wikimedia.org/wikipedia/commons/3/36/Investmentbubble.jpg>. • "Center on Budget and Policy Priorities." Chart Book: The Legacy of the Great Recession —. N.p., 9 May 2014. Web. 20 May 2014. <http://www.cbpp.org/cms/index.cfm?fa=view&id=3252>. • Goldman, David. "Great Depression vs. 'Great Recession'" CNNMoney. Cable News Network, n.d. Web. 20 May 2014. <http://money.cnn.com/news/storysupplement/economy/recession_depression/>. • "The Great Recession." Wikipedia. Wikimedia Foundation, n.d. Web. 22 May 2014. <http://en.wikipedia.org/wiki/File%3AGDP_Real_Growth.svg>. • "The Social and Economic Effects of the Great Recession." Home. Russel Sage, n.d. Web. 22 May 2014. <http://www.russellsage.org/research/social-effects-great-recession-description>. • "Dow Jones Industrial Average (2000 - Present Daily) - Charting Tools - StockCharts.com." Dow Jones Industrial Average (2000 - Present Daily) - Charting Tools - StockCharts.com. N.p., 1 May 2014. Web. 22 May 2014. <http://stockcharts.com/freecharts/historical/djia2000.html>. • Folsom, Burton. "Comparing the Great Depression to the Great Recession." : The Freeman : Foundation for Economic Education. The Freeeman, 20 May 2010. Web. 20 May 2014. <http://www.fee.org/the_freeman/detail/comparing-the-great-depression-to-the-great-recession>. • Statisitcs, U.s. Bureau Of Labor. "The Recession of 2007-2009." The Recession of 2007–2009: BLS Spotlight on Statistics (n.d.): n. pag. Web. 22 May 2014. <http://www.bls.gov/spotlight/2012/recession/pdf/recession_bls_spotlight.pdf>.