Why is economy bad in this year spcially?

Question

Why is economy bad in this year spcially?

Answer 1

OIL = $136 / barrel app. :D

Answer 2

gas, housing market is still falling somthing like 1 in 11 homes is in foreclosure. fuel prices have made food prices go way up. companies wont pay there employees more. credit card debt is higher that the national debt. the dollar keep dropping alot of reasons.

Answer 3

Gas Prices

You see, in order to get things to a store, A truck driver has to drive the stuff there, but if gas prices go up, The truck driver will have to pay more in order to get the stuff to the store.

If it costs more money to get stuff to the store, that means the store's losing money, so they will have to raise prices on their goods to be able to pay the gas fees for the truck driver, and still make as much money.

Also, another reason is the housing market, but I don't want to go into details there.

Answer 4

The global pool of money (all the saving accounts in the world) were looking for a way to make their money grow after the United States government offered a lower rate of interest than it had before, so they went to home morgage bundles. They at first only bought extremely secure morgages, but then they couldn't get enough of them and wanted more. Banks started to give the morgages to less qualified buyers to get more for the global pool of money's appitite, and rebundled them into more secure looking morgages. Many of the less qualified buyers could not pay back the loans, which caused the global pool of money to suffer a great loss. This catastrophe was transfered to the public, since some of this was their money. Another side effect of this is that it is more difficult for even qualified buyers to get a loan. Combine this with rising gas prices, and ethonol which both raised the price of food, and you've got a difficult economy.

Answer 5

Because the president (Bush) Is pissed off that we all hate him and before he leaves the office, he is takeing us all down with him..

Answer 6

The housing market (sub prime mess), the weak dollar, the increase in food and fuel.

Answer 7

The problems that have been developing over the last few years (and some even LONGER) have exploded in the last couple years.

Mortgage fraud has been going on for a while.  People have blamed it on deregulation of the mortgage industry.  Regardless of whether that is the case, a lot of people have been scammed.  Thanks to the awesome housing market before and good time to buy-sell houses, many people bought mortgages.  A lot (not every) mortgages turned out to be bad and frauds.  And a lot of people lost their only way of paying down homes and have been forced to give the houses away.

(Foreclosure).  Another problem is the oil.  A lot of demand has come in recent years for oil.  The US always had a lot of demand.  China and India also have much demand for foreign oil too.  So that puts some problems out there...more demand means higher prices.  Higher prices means other things get higher as well.  Because vehicles are used to transport food, they depend on oil...and with oil prices higher, the transportation companies will charge food producers higher prices, and then the food producer will charge higher prices for food (that is why food costs are so high, along with poor weather making crops less able to produce, causing prices to rise a lot more too).

A third problem is the deficit.  During the last 8 years the deficit has gone up by a lot (chart shows it already went up during first three years of Bush term http://traxel.com/deficit/deficit-percen... )  That has been a huge problem.  Thanks to tax cuts (especially-mainly cuts to taxes of rich) and high spending, we have high deficits.

High deficits result in high national debt.  Debt makes more dollars printed (pay for the debt with dollars).  And that's a problem with increased dollars.  The larger amount of dollars, the more the dollar value goes down.  So, the dollar has gone down a bunch.  Thus- inflation goes higher even more (dollar worth less so things much higher, expensive).

What has caused inflation to rise are actions by an organization.  Specifically by the FED. To deal with the slow economy (and poor econ growth), the FED cut interest rates.  Now that would be used to stimulate growth.  Unfortunately, the FED is now in a tough spot (lower interest rates have led to more inflation, yet if they raise interest rates, that could cause problems and slow/poor performance by mortgage situation).  It has lowered rates so much that there is a lot of inflation.  Yet as I mentioned, if it raises rates, it could cause increased economic slowdown.  This is because it would reduce econ growth and harm areas that are already slow- mortgages and credit crunch. (much debate over this, but its a huge risk).

That brings me to this point.  The credit crunch is also a huge problem.  So many people have bought on credit in recent years.  That leads to high debt.  As a result, they find selves to be owing a lot of money and being in knee-high debt (this is not related to national debt I think).  So, they [consumers] are also in economic trouble.

Lastly, the war and handling by Bush have been terrible too.  He's ruined relations with the Middle East (which have caused oil prices to go  up.  Greedy businessmen are also cause for that).  When relations and tension are high, prices are set to be up (due to less pumping and speculation that prices would be significant).  In addition, he's ruined our economy through the wars too.  With wars that don't have a close end in sight, and so many problems in them, our nation has spent a lot on the two wars.  It could have been a lot lower if we had a plan (and figured out how to leave earlier and have stability in the nations Afghanistan+Iraq).  However, we didn't.  So we are forced to use high spending and as result increase our debt..,

Answer 8

Our politicions and the decisions they have been making for several years. Of course our president stands up there also. Its not for lack of taxes. Its misappropiation of them.

Answer 9

Alan Greenspan.

In 2003 and 2004 Greenspan kept the mortgage rates at 1% even though the economy picked up.  With this low interest the banks and mortgage people loaned a lot of money to deadbeats.  this inflated the house prices because every idiot was buying three or four houses to flip using these mortgages

after pretty well everyone had these mortgages the house prices started to go down.  the people started defaulting their mortgages.  this causes the banks and mortgage people to lose a lot of money and tighten up their lending.   as a result of tightening people could not get loans for spending like holidays and cars so then these people started doing worse.  then they got laid off and couldn`t buy things so the stores did worse.

gas prices are insignificant.  they only started going up this summer.  the economy went bad in august of last year due to the mortgage problems.

Answer 10

george bush.

he mad us go to war

we shouldnt have done that know millions are dieing for no reason

also gas prices are making everything expensive.

Answer 11

The high cost of oil drives up the cost of everything, because everything you buy needs to be shipped, and fossil fuels are used.  

The high prices are fueled by a weak US dollar.  Oil is traded in USD, so it's a really good investment for foreigners.  This of course drives the price up.

Also, high food prices aren't good for the economy.  

I am sure there are other factors, I am sure other answers will provide further info.

Answer 12

I have no idea how it got so bad except for the bush bullshit, but it sucks!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!...

Answer 13

Because Americans say "spcially" lol

It's the monetary system system or "how our money is handle system".

In a TIGHT NUT SHELL!!! it's like this. Exactly like this.

There's this thing called the "Feredal Reserve" that loans our government money or dollars to use as their currency.  The government has no control over our dollar, but RICH greedy Central Bankers do. They have since 1904.

Now the dollar is used to be backed in gold. Not any more. A dollar gets all it's worth by how much debt our government is into with the Federal Reserve.

Just take out a dollar bill. See the part where it says "This note is legal tender for all debts, public and private" and while you're at it look to see how many time you can find "Federal Reserve" on it. And then compare that to how many times you see USA treasury.

And now the Federal Reserve are inflating the dollar, which means they are printing dollar bills out of thin air. So to balance this they are dropping intrest rates (maybe you heard about that) which means the value of the dollar is going down. So the market is going down. And we are going down.

They kill the dollar on purpose to try and fix inflation. And inflation happens when we want more dollars.

The monetary system we use today is the same system that killed the Roman Empire, Spanish Empire, The British in the mideval times and ALL great empires.

It's our turn.

But it's "okay". The economy is going to go to h**l soon. But then it'll shoot back up. This is going to take YEARS though.

Don't believe me? Research it. It's custom that with the monetary system we have  a Depression every 70 years. Don't you wonder why the middle class is shrinking?

The rich get richer and the poor get poorer.