why is the United States of America in a recession?

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  • 1 decade ago
    Favorite Answer

    mainly, in my opinion, because of the overwhelming power of China and India as economic powers. China has a huge resource of industry and does not abide to the same worker laws that we do, making it impossible to compete.

    India has a knack for technology and medicine. Companies can provide a service cheaper by outsourcing, and they do. Just as an exercise, try to think of how many times you call for tech support, a nationwide business, etc... and speak to a person of another nationality that is obviously in another country. I know I have spoken to alot of them.

    And may I say that the above answers are correct as well. There is not ONE reason or cause why this is happening.

  • Anonymous
    1 decade ago

    There isn't really one single reason or trend to blame for the current economic problems. In truth it's probably years of built up problems and fundamentally ridiculous policies.

    -Many people blame the credit crisis. Way too many people who should not be "borrowing" money and taking out loans actually have been doing so for the past several years and aren't able to pay it back. Collectively this puts the nations credit in a massive hole.

    -Other countries are "catching up" or capitalizing on opportunities for growth. Nations like China and India are industrializing and advancing at incredible rates.

    -Henry Paulson. If you don't know who this clown is, please do yourself a favor and go to Wikipedia to look him up. This man is a complete joke and I personally blame him for his diabolical decision making and policies that will, in all likelihood, worsen the problem before it gets better.

    Something else to note that has just completely baffled me for years is our dependence on the Middle East for fuel. Our country literally could not survive if our supply of fuel was cut off. We have been relying on unreliable Middle Eastern countries to provide us with oil for decades and this is a recipe for disaster. One wrong foreign policy move or mistake could be a critical one. The United States is in an awkward position of supporting Israel and its policies but at the same time must support Middle Eastern countries, who despise Israel, in order to receive fuel.

  • Anonymous
    1 decade ago

    US consumers borrowed too much and spent too much money on TV's, cars, houses, and vacations. Now they have to repay their debts. Which is hard. People have to cut back on their spending and start saving in order to pay off their debts.

    The only kind of borrowing that doesn't lead to a recession later on is when people and businesses use the borrowed money to increase their future earnings. Student loans are one such example. And business loans for building a new factory is another such example.

    When people borrow and spend on non-productive assets, things, and services that don't do anything to increase their future income. Then such borrowing leads to a recession later on. Because people will have to cut back on their spending in order to pay off their debts.

  • 1 decade ago

    Everyone spent money that they didn't have. Lenders were getting too creative in loans and, with the rates going up, people weren't able to pay off their payments/bills...so basically, the banks gave away money that they didn't have and gave it away to unqualified people.

    We're in a recession because it was one bad decision after another.

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  • 1 decade ago

    Because Bush put all his efforts towards raising gas prices instead of helping manage the American financials

  • Anonymous
    1 decade ago

    ThornyRo is 100% correct and I congratulate her for that. I could not have written it better.

  • Anonymous
    1 decade ago

    Because of the economic status.

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