With all this talk of recession and the terrible state of the U.S. economy you may be wondering how one of the leading countries in the world ended up in this situation. The collapse of the U.S. economy has been blamed on everything from the politicians to the greed of the citizens. There is no one place to point the finger of blame, everyone who enjoyed financial success from the government to the business owner down the street are all a part of the situation our economy faces today.
Understanding what caused the collapse of the U.S. economy means being aware that there isn’t one specific reason that it happened, but that there are several factors each and every day that affect the economy.
Just as everyday citizens have to learn to live within their means; our country needs to do the same. There is no reason why as a country we should be trillions of dollars in debt. Our government has behaved similarly to the citizens who live on credit. Borrowing, flourishing and not repaying the debts is a sure way to fall into an economic collapse. The responsibility for the nation’s debt doesn’t fall on one specific group, just as the other aspects of our economic situation doesn’t fall on one class of citizens or on one specific politician.
Home buying, or rather home lending, has been a major cause of upset in our country. People qualified for homes that in reality they could not afford. This in turn led to loss of the homes when the job market dropped. There are thousands of homes sitting empty across the U.S. and there are many more thousands of homeless families who would appreciate the opportunity to own a home. But the financial situation in our country now makes it nearly impossible to remedy this situation. There are many other situations, too, that have cost Americans millions of dollars. A growing trend that also claimed many victims was companies often misleading consumers into purchasing payment protection insurance. (You can read more about this issue here ppiclaims.org.uk). So many people stand to lose if the homes are sold for less than what is owed on them.
The job market began to decline when the U.S. economy began to experience a decline rather than growth. This has led to many situations of unemployment and loss of wages. When people have no money to spend, the economy gets worse. Supply and demand drops when there is no demand because citizens can’t afford to spend. This in turn makes the costs of items that are in demand such as fuel, electricity and groceries to go up in compensation.
The US Economy
When the U.S. economy is in the shape it is now, there are many years of struggling and rebuilding ahead. There is no fast fix, there is no way to create jobs when there are no companies that are growing and flourishing to hire the citizens. People who have jobs are holding on to them for all their worth just to make ends meet.
The days of living large on your annual salary, having money left over at the end of the month, and being able to save for the future while still making ends meet and paying your bills are over. Every household should be cutting back on nonessentials, attempting to save and doing everything possible to get out from under credit debt.
The only way the U.S. economy will improve is if the general attitude of being deserving changes and everyone works to improve the situation. From the average citizen to the highest level politicians there’s a large gap between how we lived just 5 years ago and now. Credit, living beyond our means and shouldering too much debt is not just an individual problem; it’s a problem for our government, our country in general and the citizens. Learning to live within our means definitely means a lot of cutting back and relearning about the value of the dollar.