What Caused the 2008 Great Recession? | PragerU
PragerUFebruary 23, 20266 min75,234 views
21 connections·33 entities in this video→The Great Recession Explained
- 📉 The Great Recession (2007-2009), also known as the subprime mortgage crisis, saw a 4% GDP shrinkage, doubled unemployment, a 50% stock market drop, and millions losing homes.
- 🏠 The crisis began in 2006 when housing prices, after years of rising, started a freefall of 30% nationwide and up to 60% in some markets.
The Role of Government Policy
- 🏛️ Contrary to common explanations of deregulation and greedy banks, this video argues that federal policy was the primary driver.
- 📜 The Community Reinvestment Act (CRA), signed in 1977 and expanded in 1995, aimed to make homeownership easier for low-income Americans but imposed quotas on banks.
- 🏦 Banks faced government disapproval for expansion plans if they didn't meet loan quotas, creating a
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What’s Discussed
Great RecessionSubprime Mortgage CrisisCommunity Reinvestment Act (CRA)Fannie MaeFreddie MacMoral HazardHousing PricesInterest RatesFederal PolicyGovernment MandatesEconomic DownturnMortgage Portfolios
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