Economics

Period 10 Group 4

Globalization

Globalization
o
moving beyond domestic borders and into international markets; increases international
trade

Increasing interdependence between world economies

Rise of China

Internal Reforms
o
protected domestic economy
o
gave benefits to the poor peasants and farmers in the 1950s
Capitalism
o
cooperated with Western industries and borrowed their strategies
o
widespread public investment

Chinas GDP (Gross Domestic Product)

North American Free Trade Agreement

United States, Mexico, Canada

To eliminate tariffs and other barriers of trade and investment

Came into effect on January 1st, 1994

Great Recession of 2008

Lasted from December 2007 to June 2009

Caused by the burst of the housing bubble

Banks were lending a lot of money but there was no real money to back it up

Effects of the Great Recession

Loss of consumption + Crash of financial markets/ stocks + Collapse of business investments

Loss of jobs + Low family income + increased poverty

Assets of property owners plummeted

Recovery

Economic Stimulus Act of 2008 (January 2008)

o sent a tax rebate and increased limits on expensing investment
costs

Troubled Asset Relief Program (TARP) in October 2008

o Allowed US Treasury to put money in nations banks
o 150 billion $$

American Recovery and Reinvestment Act (ARRA)

passed in early 2009

Legacy Of Great Recession

Main Causes of the Great Recession

1. Credit crunch and fall in bank lending
2. Fall in confidence resulting in financial instability
3. Fall in exports from global recession
4. Collapse in house marketing Negative wealth effects
5. Fiscal austerity compounding the initial fall of GDP
6. Europe: single currency created more problems
because of over-valued exchange rates and high bond
yields

Legacy Of Great Recession

economy has been growing since June 2009

increase in jobs
corporate profits have increased sharply
forclosures falling
household wealth expanding

Ronald Reagan

Reaganomics
o Reduce growth of government spending
o Reduce federal income tax and capital gains tax
o Deregulation of domestic markets
o Increase military spending
Supply-side economics
o providing to supply more goods
Trickle-down theory
o stimulates economy by lowering taxes and promoting consumption

George D.W Bush

Sweeping financial deregulation helped build the housing bubble and allowed
financial institutions to go after risky trades unchecked.
Eliminated the rules that allowed Wall Street to cause the financial crash that
plunged the nation into the Great Recession.

Tax cuts

Wars in Iraq and Afghanistan

Hope For Homeowners

Bushs proposal to assist those struggling with their mortgages, was a colossal
failure

Barack Obama

(Obama Stimulus Package)

Recovery Act of 2009

o
Decrease unemployment
o
Maintain transparency in government spending
o
Stabilize and stimulate domestic economy
Affordable Care Act (Obamacare)
o
decrease spending on healthcare
o
give affordable health insurance to everyone
o
expanded health care eligibility

Bibliography
-

http://www.britannica.com/EBchecked/topic/1661642/The-Great-Recession-of-2008-09-Year-In-Review-2009/286636/TheUS-Response (6/3/15)
http://thinkprogress.org/economy/2012/06/14/499523/5-reasons-americans-are-right-to-blame-bush-for-the-bad-economy/
(6/3/15)
http://www.un.org/en/development/desa/policy/cdp/cdp_background_papers/bp2000_1.pdf (06/09/15)
https://www.foreignaffairs.com/articles/asia/2008-01-01/rise-china-and-future-west (06/9/15)
https://images.angelpub.com/2013/39/21530/china-gdp-by-2025.png (06/09/15)
http://www.globalresearch.ca/china-rise-fall-and-re-emergence-as-a-global-power/29644 (06/10/15)
http://www.naftanow.org/faq_en.asp#faq-1 (06/10/15)
http://www.recovery.gov/arra/About/Pages/The_Act.aspx (06/10/15)
https://www.upcounsel.com/what-is-obamacare (06/10/15)
http://www.commondreams.org/sites/default/files/imce-images/trade-globalization1.jpg (06/10/15)
http://www.federalreservehistory.org/Period/Essay/15 (06/10/15)