Recession

//Mortgage crisis:// One of the factors of this recession was due to the subprime mortgage crisis that was officially announced in 2007. These subprime mortgages started as the Finance Committee of Congress put pressure on banks to lend money so people could buy homes. Banks were lending money so subprime lenders who then lent money to those who were not ordinarily qualified for a load. The subprime lenders sold mortgages to the banks as the banks bundled the good mortgages with the bad mortgages and then sold them to investment plans. These subprime loans became known as "balloon loans" because they were sold at a cheap rate for the first five years of purchase, but then gradually became more expensive. In result, people bought homes that they couldn't afford, so when the mortgage went to a higher rate, they wouldn't be able to afford it anymore. Because of this, the housing bubble, the real estate levels of income in mortgages, failed. In response to this, the baking system collapsed due to all the mortgages and loans that they still needed to be refinanced for. The result has been a large decline in the capital of many banks and U.S. government sponsored enterprises, and tightened credit around the world.

//Gas becoming an expensive problem:// Due to the economic downfall that our country was facing, a raise in petroleum was made. In 2008 the price of petroleum hit $100 per barrel, a record-breaking price for gasoline. In to this expense issue in all Americans personal incomes, every-day people started to become more aware of what needed to be done. For example, "car-pooling" was greatly encouraged as well as public transportation. These rise in gas prices effected every American from Wall Street suits to Katrina victims down south.