# Causes of Economic Recession



## Zack (Oct 5, 2012)

Economic recessions are caused by a decline in GDP growth, which is itself caused by a slowdown in manufacturing orders, falling housing prices and sales, and a drop-off in business investment. The result of this slowdown is falling employment, and rising unemployment, which causes a slowdown in retail sales. This creates a downward spiral in manufacturing and increased layoffs. A stock market decline, known as a bear market, can either be a result of a recession but is often a cause itself.
But what usually causes the slowdown in the first place? Each recession has its own specific causes, but all of them are usually preceded by a period of irrational exuberance. This is part of the expansion phase of the business cycle.


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## Lucky Jim (Sep 2, 2012)

Who's to blame for recessions and national debts and stuff, the politicians?
Are they stupid, or is there nothing they can do to put things right?
The US national debt went from 10 trillion when Obama took office, to a current 16 trill. Was it his fault or would it have happened anyway?
Would Romney be able to stop it getting worse?


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## WVTactics (Mar 26, 2012)

Jim you have made some interesting points I wouldn't know if anyone could help us now. Unless products from over-seas where stopped. Then maybe a turn around could happen.


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## PrepperRecon.com (Aug 1, 2012)

A collapse in market confidence is usually what triggers a slowdown. For example, all of the problems with the housing bubble were present several years before the meltdown, but the markets thought everything was OK, so the bubble continued to inflate. Sub prime loans starting going bad, oil went to near $150 and every one ran for the exit. It was going to happen at some point because of the fundamental problem with bad investments, but the market fear was the trigger.


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## PrepperRecon.com (Aug 1, 2012)

Lucky Jim, The politicians are responsible for putting in Fed secretaries that flood the market with worthless money. They do so to try to prop up asset prices across the board, but they can not ultimately control where the money ends up. This causes asset bubbles which eventually pop.


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## rim (Nov 17, 2012)

In 1995 Bill Clinton loosened housing rules by rewriting the Community Reinvestment Act, which put added pressure on banks to lend in low-income neighborhoods. Clinton also signed the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act, a cornerstone of Depression-era regulation. He also signed the Commodity Futures Modernization Act, which exempted credit-default swaps from regulation. It took a few years, and some other bonehead moves post 9-11, but I think he laid the foundation to this mess...


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## mvan70us (Nov 24, 2012)

rim said:


> In 1995 Bill Clinton loosened housing rules by rewriting the Community Reinvestment Act, which put added pressure on banks to lend in low-income neighborhoods. Clinton also signed the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act, a cornerstone of Depression-era regulation. He also signed the Commodity Futures Modernization Act, which exempted credit-default swaps from regulation. It took a few years, and some other bonehead moves post 9-11, but I think he laid the foundation to this mess...


ding ding ding we have a winner!! and alot of people blamed bush!....btw is every one ready to pay more taxes this year?


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## badey (Nov 9, 2012)

Ultimately, I think the people who vote in the loser politicians that made the mess are to blame...


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## fedorthedog (Feb 28, 2012)

Lucky Jim said:


> Who's to blame for recessions and national debts and stuff, the politicians?
> Are they stupid, or is there nothing they can do to put things right?
> The US national debt went from 10 trillion when Obama took office, to a current 16 trill. Was it his fault or would it have happened anyway?
> Would Romney be able to stop it getting worse?


I think the blame lies with the people. We demanded high returns on our investments making CEO'S look for short term profits and then rewarded them for stupid decisions we demanded financing for every one so they could buy a house and then got mad when some could not pay back stupidly made loans and blamed the bank. We elect idiots and then expect solutions from Einstein. We are the problem.


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## inceptor (Nov 19, 2012)

Common sense is a misnomer. It hasn't been common for a long time. The 60's was the start of the ME complex and it has grown by leaps and bounds. 

"I don't care about them, what's in it for me?" 

"I like it so it must be right." 

"Nothing can interfere with what I want to do, if I want it then it should be moral, right and legal."

These are the current mantra's. This is what several generations have grown up hearing and now believe it to be fact. Factor in the current admin chooses to ignore laws they don't agree with. We are being told we deserve it all.


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## Medelwr (Jun 10, 2012)

Maybe the only way to get out of this mess would be to get all the rich companies that headquarter their "wonderful" money grabbing corporations to, for one year, pay to the country they are based in all their profit. While I am not in the poverty band of my country I know that when everything comes down to it you have to get the oil barons to release their iron fist around the throats of the whole population. When you think of it, inflation is solely based around base products. When you think of it, farmers are charging more money to sell their product. Why? Because of two factors, property taxes and gas to run their equipment (I'm sure there are a few other issues but I'm sure most of them, when you follow the trail either ends in higher taxes or because of oil). If we could get our populations to rely on more sustainable methods then the majority of these economic issues would probably cease to exist. So, maybe our governments should now impose what I would like to call the "decades of gouging" tax and disallow these companies to layoff workers for a year and disallow them to raise their prices and watch how our national debts would start to be erased.


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