5 Reasons This Decade Has Been Financially Unstable

Posted by MoneyThinker in Current Events, featured | 0 comments

On Sunday, the 10^th anniversary of 9/11 will be honored. I know that, at my church, we’re honoring all first responders, who will be in uniform during our services. There will be memorial services around the country, at the places where the terrorist attacks occurred. 9/11 was one of several reasons that our country suffered financially in the last decade, and today we’re going to look at that event and 4 others.

1. 9/11 and The War on Terrorism. 9/11 was one of the most defining incidents of my generation. People who are now in their 20’s never saw any sort of attack on American soil until this occurred. The government quickly reacted, putting a bit of money into the economy to keep interest rates down as the stock market reacted. So even though 9/11 itself didn’t make the economy unstable, the subsequent War on Terrorism did. Money was invested into the war, the war didn’t appear to be going anywhere and that made the economy unstable.
2. Political Unrest in the Middle East. Not only was the War on Terrorism going on, but political unrest in Egypt, Iran, Iraq, and other countries made their economies unstable, and because of the world becoming smaller and more interdependent, everyone’s economy suffered, especially the United States’. Throw in the American dependence on oil from the Middle East, and this mess had a huge effect on the U.S. economy.
3. Government takeover of Fannie Mae and Freddie Mac. This was just a culmination of symptoms that had been occurring for the entire decade up to that point. Financial institutions (banks, credit unions, loan agencies) had been suffering because of giving too much credit to lenders. Individuals started to file bankruptcy more and more, which lead to these debts not being paid… financial institutions suffered, and the “bailout” and government takeover of Fannie Mae and Freddie Mac was the life preserver to save a whole industry.
4. Technological “Bubble”. Stock Market “bubbles” occur when some industry, in this case, the technology sector, has a sudden surge in stock prices. The prices rapidly increase; people start to buy stock more rapidly, which results in the prices increasing more. They’re called ‘bubbles’ because of what they eventually do: Burst. The technological bubble did just that, and a lot of over eager investors lost a lot of money when the stock evened out.
5. The decade of Natural Disasters. Last but not least, this year has been a prime example of how bizarre our world has been acting on the natural side of things. Tsunamis, earthquakes, tornados, and hurricanes have ravaged across the world, leaving both physical and financial damage in their wakes. Recovery efforts have been swift for the most part, trying to get people back on their feet, but the financial strife has been hard to bounce back from.

So, yes, 9/11 was only the beginning of some events that have beaten the U.S. and world economies up pretty good. Will we recover? I think it will happen eventually, but, like anything, it takes time. Enjoy your weekend, remember 9/11, and as always, spend smart, save smart.