The housing market collapse in 2008 hit the United States very forcefully. The crisis arose from years and years of bad decisions. Hundreds of thousands of faulty loans were given out to anyone and everyone. Due to the failure to screen the financial status of recipients of the loans, an astronomical number of people defaulted, and this lead to, Wells Fargo, JPMorgan Chase, Citibank, and many other ginormous banks being way over their heads in debt. The result of the banks collapsing would have left the world in a state of panic, so the United States bailed them out for 2.9 trillion dollars. Putting our whole country immersed in debt. The real losers of the financial crisis were the citizens of the united states, millions of people, had invested large sums of money into the faulty loans, thinking that they were safe and secure when really they were a risk bet at best.
You may ask, what has changed today? How are we preventing this from all happening again? The answer is not much, it has gotten worst. The balance sheet of the federal reserve’s debt has increased five times over since the crash in 2008. While this exponential increase of debt continues to skyrocket, so do the most common assets of citizens (housing, stocks…). Something does not add up here, how would we be in five times more debt than we were in 2008, and have assets still rising? The growth undoubtedly cannot be maintained over a long portion of time, so eventually, we will have to witness another crash. We as of right now are in a complete bull market, and I feel that within the next couple of years that will come to a prompt halt, and most likely the next crash will be much worse than the last. In the next recession, the same thing will happen, the victims will be the majority, the citizens.