What is the real cause of slowing down in the U.S. Economics in year 2008?

Question

why the economics is like this these days? what is the cause of it? and why the oil price is getting higher? why the housing business is bad? and why goods and services are so expensive? plz answer?

Answer 1

Capitalist economies have  business cycles, that  is periods  of growth, followed  by speculative bubbles that then bursts.  The major cause to the current  down turn is the bursting of the housing bubble  and its effect on the financial markets or depending on how you look at it, the formation of the bubble  and the lax regulations that allow  it to endanger the banking system.  The high price of oil  also has contributed to the problems, but the growing demand and higher prices was predicable and the lack of foresight by individuals and government has made it a bigger  problem than it should be. If we  drove cars that got 30 miles to the gallon it would hurt much less.

Answer 2

The icome tax, payroll tax and compliance costs have taken its toll on the dollar. Futhrer, other countries have lowered their tax while WE USA keep our's high. Thus exports have the built in hidden embeded tax in the price.

Answer 3

The economy always works in cycles, with times of prosperity offset by harder periods. Oil prices are rising because the demand is increasing very rapidly, but the supply is not large enough. There's a great deal of debate about how much oil there is, but the real immediate problem is that there are not enough refineries to produce what is needed. Oil companies are unwilling to build new refineries, which would require a large investment, because at this time it's clear that we'll be making efforts to decrease our dependence on oil. Keep this in mind: oil prices are high, but so far we are not able to reduce usage, so that means the oil companies and oil producing nations have a chance to cash in before the game ends.

You cannot underestimate the impact of oil on the world economy. All industry and commerce relies upon it. Even things you would never think of are tied to the price of oil. Goods cost more to produce and more to transport, and those costs are passed on to consumers. In America, we have a tendency to rely on housing as a big source of jobs and wealth. But if the whole country is suffering because of higher prices for everyday life, that means people don't have as much to spend on things like houses, and a lot less confidence that it's wise to do so. A few years ago, lenders noticed that fewer people were borrowing money to buy homes, so the lenders started giving out loans more easily... loans they really shouldn't have given. In an economy that keeps getting worse, people weren't able to keep up with the increasingly high interest payments on the bad loans they'd signed, which meant they lost their homes. Now it's really hard to sell a home, because nobody has the money to buy.

It's a little more complicated than all this, of course, but the essential culprit for our economic woes is the high cost of oil. It makes business less profitable, which means there's less money to go around. Consumers are unable to buy since they have less money, which means business is less profitable, and so on. Still, the main mistake people always make when thinking about the economy is to believe that the current trend must continue indefinitely, whether it's good or bad. It always changes. The question is, where will you be when it does?

Answer 4

The devaluation of the U.S. dollar on the world market.  

Answer 5

Republicans do the same each time they get in office.  They suck all the available investment money out of the economy for themselves and it takes a Democratic president to make it ooze back into the markets