Why Does Global Recession Matter

Global recession is an extended period where there is an economic decline all over the world. It affects millions to billions of people and it has hit the poor countries the hardest. Why does global recession matter, though? Global recession matters because it slows down the growth of the world and the people living in it. It also effects banks and creates higher numbers of unemployment. However, what most people don’t understand is that recessions are a normal part of the economy that the world experiences. The U.S. is a mixed economy, meaning which it’s a combination of one or more of the following three characteristics; public and private ownership of industry, market based allocation with economic planning, or free-markets with state interventionism. In order to completely understand the causes of the current economic crisis it is most helpful to look back over to the post second world war period. From the 1950s to the mid 1970s, the rate of profit in the U.S. economy declined almost 50% and this critical decrease in the rate seemed to have been a piece of the general overall pattern during this period, influencing every single capitalist nation. According to Marxist’s theory, this very notable decrease in the rate of profit was the main reason for higher unemployment, higher inflation, and lower wages that

Government doing to help the citizens and their economy? In 2008, an “economic stimulus” bill was passed by Congress and this bill was $168 billion that covered tax rebates for household and tax cuts for businesses. Although these cuts had some positive affects on the economy, their effects were small and short-term. The previous Obama administration and democrats in congress were in the process of possibly drafting a second, much larger stimulus package of about $850 billion and although the plan will make the recession a little less critical, most people don’t think it will be able to generate a full recovery of the