December of 2007 marked the embarkation of an eighteen-month long global financial crisis, which in turn triggered a recession unprecedented in its slow recovery. Although America has experienced numerous recessions in the past none such have been characterized by such high unemployment along with a snail like rate of growth in GDP. To put it into perspective, "the Depression was the last time in American history that unemployment exceeded 8 percent four years after the onset of recession", coupled with the fact that GDP has grown at less than half the recovery rate compared to previous recessions (Stgilitz 2) (CBO 1). In order to stimulate more prosperity within the economy, effectively lowering the unemployment rate and lowering our GDP to debt ratio, I believe that we must invest in human capital and infrastructure along with increasing taxes on the top one percent of income earners in America. Before analyzing how these measures would foster growth in the economy we must first understand the origins of the crisis, what measures were already taken and how our economy currently fares. The causes of the crisis are deeply routed in a number of factors involving interplay between loose regulation and high risk. These factors are centered around the snowballing cause and effect chain that began with the housing crisis. Each factor along with the policies that were implemented in response to curtail the effects of them will be analyzed in relation to the state of our current economic plight.
As much as people would like to believe that you could boil down the cause of the economic collapse to one specific event or the actions of one particular group, it's simply far too complicated and interconnected to be so. Rather the financial crisis occurred due to numerous "triggers", certain events or economic factors that directly induced the collapse, and "vulnerabilities", structural flaws in federal regulation and the financial system that intensified the primary wave of shocks (Bernanke 1).
