Causes of the Economic Downfall

Looking back into history, we can see the different economic struggles and cycles that America has gone through. Time and time again the country has seen up times and the country has seen down times. Each point we can now see where it was we made a mistake.

So what is the reason this time? Can we find out what it was? The biggest reason we are in the state we are now is due to our own doings. For instance, many national banks have gone under and out of business totally. Why? This is because we the spenders spent too much and had to take out banks loans. Many of these banks offered little to no money down. We took advantage of that. That was also our mistake. This is because many of these banks began to charge interest later. Boy did they charge! The interest on many people's bills came out to be much more than the original price of the item they were paying on. This vicious cycle progressed into a downward spiral.

Sadly this is the description of what happened to many Americans. What were they to do? The only "solution" that seemed plausible was to declare bankruptcy. Doing this was how America began to falter. When you claim bankruptcy there are different chapters of it. The chapters are essentially what decides the type of bankruptcy you choose. (Or the type that is chosen for you) A few years ago, many Americans had one choice that seemed like the best. This chapter of bankruptcy literally wiped the slate clean. No bills! No debt and free stuff. Does that sound unfair? Yes, it is. For awhile is was legal until the government decided to change that. Smart move, but it was a little too late.

All of these loans and all of these bankruptcies are really what put America under. Terrible sounding isn't it? So, what are we doing so that this does not happen again?The government is bailing companies out. This is another grey area. Is it a good thing? Maybe. Is it a bad thing? It could be. There is just not enough information out there to decide whether this is a good choice or a bad one.

The government is cracking down on loans and the policies that go with it. From now on it will be very difficult for people with really bad credit to get a loan. Is this fair? Really it is. We have no one to blame but ourselves. It has been our decisions that have caused the economy of America some plight.

What is the next step for America? Before we can even think about the future we have to take care of what we have now. Cleaning up the mess is the first order of duty. Once we have straightened out what we have now, we can begin to form new plans. Remembering the past mistakes will help us avoid this problem again.