Verified answer

Fear.

What is wrong is a fear for the future. People are unwilling to invest and they are pulling back rather than taking risks.

What caused this fear?

You can ask Republicans and they will tell you a Democrat congress and Obama. You can ask a Democrat and they will scream bloody murder that it was Bush.

Actually, I think both are partially true.

I also think an over zealous media is partially to blame as well. Instead of reporting what is good about the world and economy, they continue to drive a stake through the heart of investors and promote doom and gloom.

Lastly, certain people go way back to Clinton and his change in mortgage approvals. He allowed people on welfare to have it counted as income. That caused a downward spiral in mortgage lending as those who were qualified based on welfare were high risk people. Since that time, there have been lots of home foreclosures and the bottom fell out of the banking industry.

Since then, the stock market has taken and dive and so many have lost money.

People need to feel confidence and our present leader is immature and inexperienced, so they lack faith in leadership that will get us out of it.

Many things, more than I have mentioned, contribute to it all. It's one huge mess. I have when the fingers are all pointed at one person in this as there are so many to blame.

Good luck with your paper.

The market moves in peaks and valleys. At the market's peak, many people were forced to decrease spending because essentials (such as groceries, gasoline, mortgage payments, etc) became really expensive. The decrease in spending sent the markets down. Also, investors started pulling their money out of investments because they had made large gains and wanted to take their profits.

As people continued spending less, the market continued its downslide. This caused some companies to start cutting salaries and hours and laying off employees. This meant that people had less money than ever to spend, which sent the market down even further, which lead to more layoffs, etc, etc. The economy has now gotten to the point where many investors are pulling out their funds (selling their shares), and people are hording every dollar that they can. So, the thing that is truly wrong is simple...people can't afford to spend money, so companies are making decreased profits. I hope I helped!

some thing I not often see reported is that with the federal tax cuts, the states apparently have lost the proportion they as quickly as gained. i do no longer know what's happening in different states, yet the place I stay the taxes are going way, way up. the valuables taxes are being protested, the sales tax might go up 2 cents extra, cigarette taxes have long previous up 40 six cents, there are different taxes i'm no longer attentive to that are being seen. I stay contained in the Midwest the place you do no longer see a great sort of protests. they are additionally thinking elevating the county tax or tacking a nickel extra on the state gas tax. there are various ramifications to each little thing the federal government does. Sorry if that makes me sound like a pessimist. Its in simple terms the actuality of it.

The problem is that the wealthy control the market. They're unhappy about paying taxes like everyone else and not getting so many tax breaks.

It didn't help when gas spiked up past $4 a gallon and people couldn't afford to do as much as they used to. Spending went down and prices went up, no-one was buying so that eliminated the need for so many jobs, no-one can afford what they used to be able to or don't have jobs to pay for it. There you have it.

Edit: and like sJean said...too many people spending money they didn't have in the first place and too many GREEDY bankers giving people money they couldn't pay back.

It had nothing to do with Obama, Savannah, you jacka$$! What happened the past 8 years? Have you been around to see it? Moron!

There are many problems with our economy, do you want recent changes that led to our very current problem? Or fundamental problems in the system?

To understand our current problems you must understand the following items:

Credit Default Swaps and Derivatives

-Subprime, Alt-A and Option Arm Mortgages

-Naked Short Selling

-Stock Market and Derivative Deregulation that has occurred over the last 20 years.

A good video about the current crises is here: http://www.pbs.org/wgbh/pages/frontline/meltdown/

To understand the fundamental flaws in the system a good place to start is here:

http://video.google.com/videoplay?docid=-905047436...

Its a video called "Money as Debt" and it is very good at getting you started.

Fear!!!

Credit Markets seized up and causes the economy to halt. Businesses failed and that started a domino effect. The event made people fearful they might be next, so that stopped buying and started saving. That created a negative feedback loop that continues a death spiral dragging the economy into the toilet.

whats really going on is that the banks have all of the states money and is soon going to have more money than the gov. AND we have helped so many countries get out of there wars and hard ship and put money into other countries that we have no more money for our country AND we are getting loans from other countries that we cant pay back so were screwed cuz we have no money

1.- Because wealthy people(bank owners,CEO.s, business owners, presidents, politicians,etc) wants more money and power and they do that by screwing middle class and low income people.

2.- Poor and middle class people wants to be like rich peolpe so we buy all that crap that we don't even need and worst we can't even efford( credit cards).

3.- Stupid war in Ira. We spend money like crazy there, for what?to save the world? I don't think so.

Even if the rich people mentioned above go bankruptcy or loss their business they don't go poor because the government(politicians) give them money for their "business" banks, auto manufacturers but the sad thing is that they keep the money for themselves instead of helping employees and customers pay their debts. So in a few words wealthy people is getting more rich and poor people is geting really poor.

Too many greedy people trying to get things they can't afford.

This includes bankers, financial people and the regular people who took on too much debt, either with credit cards or mortgages.

The biggest problem is: if you make $100 a month you can't spend $200.