|Type of paper:||Research paper|
|Categories:||United States Economics America American history|
The United States has always been associated with vast historical occurrences. as such, I will be outlining historical events that occurred in the United States and their general impact on the economy in whole. In so doing, we are bound to inevitably discuss the role played by various foundations in shaping the historical event, the government policies' put in play to downplay the event in question and lastly the laws and the regulations that were employed in bids to shape the circumstances due to the event. One such event is the economic recession otherwise experienced from 2007 to 2008 (Investopedia, n.d., 2019). This was generally the toughest time for which America had experienced its lowest economic downfall within the 21st century. As of 2008, the gross domestic product was valued at fourteen trillion U.S. dollars.
Recession alludes to stagnation in monetary growth. The Great Recession was a financial downturn that ensured the fall of world money related markets like banking and property businesses. The crisis incited increases in home credit surrender worldwide and influenced countless persons to lose on savings and homes. In the United States, subsidence began in December 2007. Amid that time, the total national output declined by 4.3%, and the joblessness rate declined progressively toward 10 percent. (History, 2019)
The subsidence was not felt comparatively around the world except for particular regions in Europe and North America. These regions felt the impact of recession the most, with the regression lasting through an expansive one and half a year. Time spans which preceded the crisis helped depict a preposterous increment in purchase costs for all physical assets alike. The demand for the assets was also noticeably high during those times. Of interest was how the private-banking system had more fiscal dependence than the United States of Americas' central bank. This was not supposed to be the case. This alluded to the fact that they were not open to the identical managerial oversight. This would make it unprotected against all bank runs .at that point in time, securities would prove to be of more value than the government bonds.
Banks were to blame for all of the adverse conditions. Banks were involved in reducing external funding by close to one percent for every bank. This resulted in local lending rates trading at reduced rates of about 0.6 % thereabout. This was key in relaying shock waves throughout the entire economy. Subsidiary banks along with their branches retracted on giving out loans locally in a major way as compared to similar banks in the United Kingdom (Voxeu.org, 2019). These banks in the United Kingdom tuned credit facilities offered to match the shock due to the reduced external funding by banks. As a result of the shock, lending rates to other banks were reduced significantly. The securitization model of household mortgage lending came about due. It forced banks to review mortgage securities as they were in the balance sheets. This would otherwise boost household lending.
To dodge the recession, the United States government adopted a bailout program that would aim at eradicating the crisis. On the third of October 2008, through the aid of the national congress and the treasury, the Troubled Asset Relief Program was set up. Then President H.E. George Bush signed the program into a legal execution. Through this program, the Treasury would buy all of the stock and assets for firms hit with constraints. The program had around four hundred and thirty billion U.S. dollars invested in it. The yields were viable. The returns due to the project were valued at four hundred and forty-one billion U.S. dollars. Initially, the sole purpose of the program was to boost the liquidity of the secondary mortgage and related financial markets. However, as time progressed, the intention of the program changed to how it would assist the government purchase equity from other banks.as such, the program had around seven hundred billion U.S. dollars invested as purchase power capital. Later, there would be a significant decrease in the amount to the tune of four hundred and seventy-five billion U.S. dollars. The government would then proceed to buy a stock of preference from eight banks of choice. These financial institutions would later be required to provide the government with dividends rate at nine percent. Of essence was that the program ensured that the American auto industry would continue to thrive in its operations whilst still ensuring job securities for about a million jobs (Investopedia, n.d., 2019). As such, the economy thrived hence financial institutions attained their stabilized state once more. Once more, as required, credit availability was effectively guaranteed for individuals and firms alike.
Another historical occurrence with major impacts to the U.S. economy was the Vietnam War.it so happens to be the war which reportedly stretched into the longest time for a war fought by the U.S. It claimed 58,000 U.S. lives and 350,000 casualties. The war came about as a result of the battle for superpower supremacy as a result of the just concluded world war two. The United States had attained victory over the axis powers in world war two. In so doing, the United States government had invested close to one hundred and seventy billion into the war. Continued monetary investments in the war even served to threaten the United States gold reserves. (Rohn, 2019) As such, inflation was inevitable. Increments in the prices of oil were noted in 1973.
For the Vietnam War, there was no spike in military expenses to check the beginning of the war. Heavy spending was recorded through ought the war resulting in the peoples need to question the essence of the war. The pinnacle year of military spending was 1968 when it achieved a gross domestic product of about nine percent. This conclusion was reached upon based on comparisons with those of 1973 when military spending tumbled to six percent of the country's gross domestic product. Financially, non-military spending was similarly noteworthy in the pinnacle year of the contention. This was an extensive part because of President Johnson's Great Society local projects.
As a result of the war, strategic policies and related enforcement took a tragic turn. Most importantly, through Congress, the military draft was brought to end. It was then substituted with an all-volunteer armed force. Also, the age that would permit one to cast a ballot was reduced to eighteen years of age. Furthermore, Congress likewise passed the War Powers Act over Nixon's veto in 1973. It confined the president's capacity to send American troops into battle for over just about ninety days without having to seek Congressional assent (Rohn, 2019). Such an administration would serve to reduce the president's capabilities of sanctioning the U.S. army to engage in war or related quagmires
The Vietnam War had an enduring monetary inheritance. This was partly attributed to the expanded dimensions in revenue collection for the period dated from 1968 to 1970. The victory in spending deficiencies was driven by both military and non-military costs in the mix with an expansionary fiscal arrangement that prompted quickly rising swelling in the mid-1970s. During that time, resource utilization stayed consistent and speculation stayed level. The decreased government expenditure after 1969 and up to 1973 could be credited to falling military use that exceeded the increments in non-military use. Utilization was adversely influenced by rising rates of joblessness. Amid the ten-year time frame 1965-1975, the Dow Jones Industrial Average vacillated. The oil stun and resulting time of stagnation discouraged the market, tumbling to dimensions similar to those of 1963, in 1975 (Economicsandpeace.org, 2019). It was only until 1980 when swelling leveled resulting in an increase in the value for a stock. This was to suggest that results due to inflation were not beneficial in whatsoever way.
In conclusion, as seen for the case of the Vietnam War and the Great Recession as experienced in America, it is essential that policies and regulations by the government and non-governmental organizations be in play. This is due to the fact that it may only be through their involvement that some crisis may be effectively managed, if not solved. This can be seen above.
Economicsandpeace.org. (2019). [Online] Available at: http://economicsandpeace.org/wp-content/uploads/2015/06/The-Economic-Consequences-of-War-on-US-Economy_0.pdf [Accessed 25 Apr. 2019].
HISTORY. (2019). Great Recession. [Online] Available at: https://www.history.com/topics/21st-century/recession [Accessed 25 Apr. 2019].
Investopedia. (n.d.). Did the Troubled Asset Relief Program (TARP) Save the Economy? [Online] Available at https://www.investopedia.com/terms/t/troubled-asset-relief-program-tarp.asp [Accessed 25 Apr. 2019].
John, A. (2019). How did the Vietnam War affect America? - The Vietnam War. [Online] The Vietnam War. Available at: https://thevietnamwar.info/how-vietnam-war-affect-america/ [Accessed 25 Apr. 2019].
Voxeu.org. (2019). From the financial crisis to the Great Recession: Where do the banks fit in? | VOX, CEPR Policy Portal. [Online] Available at: https://voxeu.org/article/financial-crisis-great-recession-where-do-banks-fit [Accessed 25 Apr. 2019].
Cite this page
Research Paper on Impact of Historical Events on the Economy of the U.S.. (2022, Dec 30). Retrieved from https://speedypaper.com/essays/research-paper-on-impact-of-historical-events-on-the-economy-of-the-us
If you are the original author of this essay and no longer wish to have it published on the SpeedyPaper website, please click below to request its removal:
- Free Essay Sanple on the Education of a First-Generation American
- Free Essay Describing Firms in International Trade
- Essay Sample on Religious Freedom in America
- Free Essay Sample on Shorter Working Hours
- Free Essay Example Describing the Travel Ad
- Essay Example on HITECH Act Violations
- Be familiar with various exercises that can be used during relaxation