America Economy
The global economic crisis that the United States finds itself in today is in many ways similar to the basic characteristics and consequences that followed the Great Depression that lasted from 1929 to 1933. In this paper, the Great Depression and its aftermath will be examined at length with the purpose of comparing its similarities and differences with the current economic turmoil. Specifically, this paper will highlight government bond rates, interest rates, the U.S. gross domestic product (GDP) and the trends of primary stock prices. In addition, the response of the federal government will be compared with an eye toward examining its impact and lessons learned for future crises.
One of the major indicators of a county's wealth is its GDP. This is comprised of the cumulative value of all services and goods produced within a given time period. GDP is most frequently compared from one fiscal quarter to the same quarter during the previous year. Massive changes in GDP from one year to the next typically affect the stock market, with lower GDP values corresponding to lower stock prices. Significant economic growth from one quarter to the next is typically represented by an increase of roughly 2 per cent. In the year prior to the onset of the Great Depression, the GDP in the U.S. was cut in half. This is primarily due to deflation in the domestic and world market. The resulting effect on the stock market and interest rates was catastrophic for many Americans. Unemployment rose exponentially and it took more than a decade for the economy to recover. The shockwaves were felt all over the world, though not to the extent that they were felt following the economic crisis of 2008.
In comparison, GDP dipped merely slightly during 2008. Instead, the stock market and interest rates showed the most profound response to the economic crisis. Instead, the GDP number represented a downturn from the standard 2 per cent that economists like to see. The American GDP fell by .5 per cent in the third quarter of 2008 and was roughly stagnant during the other three quarters of the year. The sectors most responsible for the downturn in GDP included the construction, real estate and service industries.
Government bonds were the solitary high performer during the Great Depression. Unlike stock prices and interest rates, government bonds continued to show progress for those Americans able to invest in them. Both government bonds and interest rates demonstrate the ability of the federal government to provide liquid assets in the marketplace. They also allow Americans to exchange assets for cash or vice versa. Bonds continued to yield growth throughout the 1930s, with a general growth of roughly 5 per cent in the ten years following the market crash that led to the Great Depression. On the other hand, governments bonds were severely weakened by the crash of the real estate bubble and the overextension of the sub-prime mortgage industry. Bonds continued to show some growth but they have been an widely considered a risky investment since the economic downturn. This distinction between the Great Depression and the current financial crisis is a reflection of the current reliance on interest rates and the speculative market, as opposed to the high level of investment in the stock market that existed in the past.
Other differences between the two depressions include the unemployment rates and the level of home ownership. The unemployment rate fell from roughly 6 per cent prior to the Great Depression to nearly 25 per cent in the early 1930s. Nothing like this has happened to our economy in the last three years. Unemployment rose to just more than 6 per cent in 2008, its highest level since 2003. Additionally, fewer than half of Americans owned their own home, both before and after the onset of the Great Depression. Meanwhile, more than 65 per cent of all Americans owned their own home at the end of 2008. However, this number has suffered in...
America's Medical System is Broken: Can it Be Saved and at What Cost? It is not an undisclosed reality that the health care system of the United States of America is the most expensive in the world. The American government spends almost two times as much per individual as compared to other advanced nation-states for achieving better health outcomes. However, they are neither better nor satisfactory and are much poorer in
..) the subsequent U.S. occupation of the island tied its economy ever closed to the United States as U.S. military governors promulgated laws giving U.S. firms concessionary access to the Cuban market. By the late 1920s U.S. firms controlled 75% of the sugar industry and most of the mines, railroads, and public utilities." (Leogrande and Thomas, 2002, 325-6) The economic dependence on the United States and in particular the high degree
America's Cuban Conundrum The Helms-Burton Act and the Cuban-American Trade Relations The United States and Cuba have had increased amounts of hostility toward each other present in their relations ever since the Cuban revolution. Not only did Cuba nationalize property held by U.S. interests during the revolution, but also Cuba became an ally to Russia during the Cold War; which was critical to the Soviet strategy since Cuba is in close proximity
America and Diversity Impacts of Immigration on U.S. America has indeed a true diverse population and challenges of having such a diversified group of people range from the most serious issues such as terrorism to minor issues of hygiene. In a nutshell the most important challenge is inculcating the American way of life in people from different races, believing in a same cause of freedom and future that is flourishing for both
America's Cuban Conundrum Issue that prompted the EU to take the Helm-Burton dispute to the WTO The stances of the U.S. government in the suctions issued upon Cuba were heavy and non-beneficial to many countries and subsidiary organizations. The benefits of the sanctions were felt with no role in bringing consistency of access to the exciting opportunities for business activities in Cuba. Many organizations, countries, and independent business people were willing to
Argument against colonization While the American government pursued this expansionist policy, many citizens expressed concerns and dissent, for many disparate reasons. Ironically, while expansionism was based on ideas of racial superiority, so did the counter-arguments. For example, labor leader Samuel Gompers argued against the acquisition of colonies, for fear of being swarmed by "the Negritos, the Chinese, the Malays" and the other "semi-savage races" from coming to the United States? Similar
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now