Contemporary Economic Issues
Deliverable Length: 800–1,000 words
The financial crisis of 2008 caused macroeconomists to rethink monetary and fiscal policies. Economists, financial experts, and government policy makers are victims of what former Fed chairman Alan Greenspan called a “once in a century credit tsunami”.
Since then, there have been various legislative and policy strategies considered and implemented to ‘fix’ the problems that allowed the crisis. The true question is whether we are headed down the same path, and if the ‘victims’ of the 2008 crisis have done anything to shift the tide. Review this clip, and review your own additional research, then share your thoughts on what caused the financial crisis and whether the United States is going in the right or wrong direction with its current policies. In explaining your position, be sure to include cited research that supports your consideration, recommendations for safeguards going forward, and what role, if any, government should play.
Your discussion should include reflections on both monetary and fiscal policies, clearly noting which caused/remedied the crisis. Make sure you include the following concepts in your analysis:
- Interest rates
- The financial services industries (CDOs, CMOs, the stock market, credit flows, money markets, etc.)
- Tax rebates
- Stimulus
- TARP
- Government debt and deficit
- Inflation
- Unemployment
- Immigration
- GDP
