Recent events that have effected America's economy?

Question

What are some recent events that have influenced the economy and America's fiscal and monetary policies?

Answer 1

The sub prime mortgage fiasco springs to mind. This situation has reduced credit availability and spending capacity of American consumers by dramatically lowering the value of their properties, consequently flooding the property market with properties nobody can afford to buy. The war on Iraq has drained Trillions from the US taxpayer for very little return. This is not a criticism of US policy. it is just an economic fact.

Wall street has also taken a hit with consumer confidence being so low and profits from huge corporations such as General Motors being forced to sell assets in order to pay short term liquidity debts.

Oil prices are also contributing towards this downturn because of the reduction of disposable income consumers have. Fiscal and monetary policy have failed in the short term to kick start the economy by cutting taxes through a series of rescue packages and further interest rate cuts may need to be considered.