The Housing Bubble: Will there be another pop?
Back in 2008, I was celebrating my birthday. It was a dinosaur themed party, and I spent most of it running around screaming like a child does when they pretend to be some big monster. At the same time, the economy was failing and ruining so many people’s lives. I was alive when this happened. It baffles me to this day that an economic failure happened, and I had absolutely no clue. Most of my generation jokes about being young and stupid, having not bought a house when we were 4-5 years old. It’s funny as a joke (I believe so anyways) but at the same time it does surprise me how this whole financial crisis happened. Obviously, it was not entirely due to the housing bubble popping, and there were more underlying factors such as the people who ignored the signs and warnings and proceeded to manipulate interest and the economy, and the malpractice and terrible investing during the time. It scares me to think something as catastrophic to the U.S. happened in my lifetime. What worries me even more, is if something like this could ever happen again, and if it’s happening as I write this paper. If it’s happened before then it’s clearly possible that we could get a repeat. I’m sure there are some countermeasures in place, but from watching the documentary The Housing Bubble, I’m not exactly comfortable in the thought of the government handling the situation. As it stands, the government and our current political leaders aren’t working wonders with our current situations; we have a ton of problems that aren’t even being addressed, and money is a growing concern.
Problems Right Now
Housing prices are insane right now, and it’s nearly impossible to buy or even mortgage a house in this current market. Furthermore, inflation is increasing so drastically that attempts at trying to save money seem to work less as we’re spending more on our “basic necessities” we’ve become accustomed to. Are these rising prices a sign of another collapse on the horizon? Housing prices also increased in 2003 whenever the government began to mess with interest rates. They’re atrociously high, even in places where housing used to be cheap. While it’s still possible to afford a house, it takes much longer to save and it’s harder to wisely invest your savings when true necessities like groceries are eating a major chunk out of paychecks. I’m not too educated on the economy or most economic matters, but I know that my government sending billions of dollars to another country at war isn’t helping the U.S.’s situation. It seems Biden has our country printing off money and giving out handouts left and right. Introducing new currency into the system doesn’t work to improve economic conditions. We can look at many examples of that. The U.S.’s own past, Venezuela, and so many more examples exist that we’re able to observe; nevertheless, new currency is finding it’s way into the cash stream. New coins are being minted (might I say ugly coins at that) and are suddenly appearing like unwanted weeds. This was another problem that occurred during the last economic downfalls, the government just printed off money and made the situation worse. I’m seeing a lot of reoccurring themes which plagued us in the past and from said past experiences I can directly link them to very problematic scenarios. It dwells on my mind that another recurrence of economic turmoil will manifest, and it appears as though the government is steamrolling right towards this impending doom.
** What’s Happening?**
This paragraph is purely my own reflection. I do not truly know if there will be another 2008 financial crisis or Great Depression, but I am connecting dots from experiences in my country’s own existence, and they aren’t promising. It begs me to ask though, how did the 2008 financial crisis happen. The documentary, The Housing Bubble, does a great job of summarizing up the scenario and addressing the problem. It did leave me with further questions though. One such question was my thought that WWII was the solution to the Great Depression. It forced our economy to function and thus led to job slots needing to be filled and inventory to be created and shipped out. My thought was that it mobilized our economy and got the ball rolling again, but one of the speakers addresses that the U.S. would have had more resources to reallocate towards the citizens. Apparently, the basic demand for clothing and other desired goods would have restored our economy eventually, but this confuses me. If the U.S. was in the Great Depression how would desirable goods eventually lead to successful economic growth, nobody had the money or means to afford any goods. Of course, the way the work force was controlled for war efforts makes sense as to the cause of the economy’s restoration. War is never good, but in our situation, it did end the Great Depression after the wars ended. Hopefully, another war doesn’t need to happen to end our current situation; furthermore, if a war did happen, would our current economic system even prosper from it? There are so many possible outcomes from these scenarios it seems, and nothing looks promising for the people of the U.S.
Conclusion
In the end, there may not be anything the people can do to avoid an upcoming market failure. If said market failure is bound to happen, anyways. Unless some extreme measures are taken, I believe we may seem some terrible outcomes for a duration of our time here in the U.S. Hopefully someone in our class discussion can explain the situation better to me and expand my views on the matter. I really am hoping that I’m looking at this a bit too one-sided and I’m proven wrong in my outlook. I also hope to learn more on the matter from the class discussion. Any expansion of my knowledge on the matter of economics and the effects we have on it would be greatly appreciated. Otherwise, I may be stuck believing my worst fears may come true for a considerable amount of time.