How Could The Great Recession Have Been Avoided?

The catastrophe could have been avoided if two things had happened. The first step would have been to regulate mortgage brokers who made the problematic loans, as well as hedge funds that used excessive leverage. The second would have been seen as a credibility issue early on. The government’s sole option was to buy problematic debts.

How could the financial crisis of 2008 have been avoided?

A monthly budget is necessary for keeping track of your financial situation.
Examine your bills to determine whether you’re wasting money you don’t have, and make sure you pay them on time.
Make paying off your credit card debt a priority, and hunt for cards with low interest rates.
To avoid costly problems down the road, perform routine maintenance on anything from your home to your health.

What steps did the government take to address the Great Recession and prevent the economy from collapsing?

Lessons for Macroeconomic Policy from the Great Recession’s Policy Challenges Eskander Alvi edited the piece. W. E. Upjohn Institute for Employment Research, Kalamazoo, MI, 2017, 137 pages., $28.32 hardback

The collapse of the U.S. housing market in 2007 triggered a series of negative economic events, including a financial crisis, high unemployment, a weakening international economy, and, ultimately, the Great Recession of 200709, the greatest post-World War II economic disaster. The housing bubble burst as a result of banks’ aggressive lending, easy credit, and mortgage securitization. The practice of pooling and repackaging financial instruments, such as mortgages, and selling them to investors is known as securitization. Lenders would securitize and sell mortgages after making loans to home buyers, obtaining more capital for lending. The subprime mortgage crisis predicted the ensuing upheaval in the banking system, most notably Lehman Brothers’ demise. Because so many industries were affected by these developmentsand because the global economy is so intertwinedthe consequences were disastrous.

Editor Eskander Alvi and his team of economists examine the tactics employed by policymakers to tackle the Great Recession in Confronting Policy Challenges of the Great Recession: Lessons for Macroeconomic Policy. Alvi forecasts the recession’s devastating economic impacts in the book’s first chapter, including huge layoffs, unpredictable financial markets, investment cutbacks, and a sinking gross domestic product. In reaction to the crisis, which resembled the Great Depression, authorities attempted to build on what had succeeded in the 1930s while also correcting what had gone wrong. Despite the fact that the Great Recession did not approach the depths of the Great Depression, it was followed by a delayed recovery and policy mistakes in fiscal and monetary policy. Alvi and his coauthors analyze the triumphs and failures of legislators who dealt with the crisis and its aftermath, the reasons for the adoption of various fiscal and monetary policy measures, and the elements for the slow recovery throughout the book.

In the aftermath of the Great Recession, the Great Depression loomed big. Emergency aid in the form of bank bailouts, as well as fiscal stimulus, were top priorities. Many common anti-recessionary policies were implemented by Congress, including tax cuts and increases in unemployment insurance and food stamp payments, which helped to prevent the crisis from extending further. Despite reaching an exceptionally high rate of 10%, unemployment was still significantly lower than the 24-percent rate seen in the 1930s. While Congress’ response to the recession was better in many ways, it also replicated several previous policy blunders. The authorities’ decision to let Lehman Brothers fail, according to one of the book’s writers, was the “one incident that most undermined the stability of global financial markets.” The choice was similar to Henry Ford’s decision to let his Guardian Group of banks to fail in the 1930s, and both incidents wreaked havoc on the financial markets. In 2010, Congress passed the DoddFrank Wall Street Reform and Consumer Protection Act in an effort to regulate lenders and safeguard customers, although this policy didn’t go nearly as far as the GlassSteagall Act, which was passed during the Great Depression. The fact that the worst-case scenario was avoided may have deterred Congress from taking additional steps to boost the economy and regulate the financial sector. Another possible contributor was public pressure on politicians as the country struggled to negotiate its way out of the recession. As Eichengreen points out, public criticism frequently influences policy decisions due to the “dominance of ideology and politics over economic research.”

After repeated criticism of the bank bailouts and mounting concerns about the national debt, fiscal stimulus came to an end. Given the severity of the recession, the lack of enthusiasm for additional fiscal policy intervention resulted in a substantially slower recovery. This inaction was the “single worst miscalculation in macroeconomic policymaking following the financial crisis in 2008,” according to Gary Burtless, who wrote one of the book’s chapters. In a similar spirit, authors Laurence Ball, J. Bradford DeLong, and Lawrence H. Summers contend that to supplement the Federal Reserve’s (Fed) attempts to raise aggregate demand, a more aggressive fiscal policyprimarily more tax cuts and government expenditure on public projectswas required. Despite popular belief that expansionary fiscal measures increase the national debt and exacerbate the problem, the authors argue that, during a recession, such programs increase the national debt in the short run but have no impact in the long run due to increased employment and output. As a result, fiscal contractions during recessions exacerbate the debt problem, prolonging the economic downturn. In the end, public pressure restricted fiscal policy during the Great Recession in numerous ways.

The Fed attempted to fill in the gaps created by the current fiscal policy discussion. Many economists feel that the country’s initial financial threat was larger during the Great Recession than it was during the Depression. Recognizing the gravity of the situation, the Fed made a conscious effort to avoid the errors of the 1930s. It lent large sums of money to foreign banks and nonbank institutions such as broker-dealers, money market funds, and buyers of securitized debt to keep credit flowing and boost consumer confidence. With the federal funds rate already near zero, the Fed used large-scale asset purchases to further slash intermediate- and long-term interest ratesa strategy known as quantitative easing. The Fed also utilized forward guidance, stating that interest rates will remain at zero for the foreseeable future. Interest rates have been lowered and asset prices have risen as a result of these efforts, according to most experts. According to the authors, the Fed was nevertheless under to the same forces that prohibited the implementation of new fiscal policy measures, albeit to a lesser extent. Some detractors argued that central bankers had no place in the mortgage-backed securities market, while others warned of hyperinflation. The Fed chairman at the time, Ben Bernanke, attempted to explain the Fed’s actions to Congress and the public, with mixed results. In order to show its independence, the Fed began decreasing its balance sheet sooner rather than later, ignoring the Depression’s lesson. Nonetheless, the authors believe that the Fed aided the economy in avoiding the worst-case scenario by implementing new monetary policy measures that can be depended on in future downturns.

Any reader interested in learning more about the Great Recession can benefit from Confronting Policy Challenges of the Great Recession: Lessons for Macroeconomic Policy. The book describes how Congress, the executive branch, and the Federal Reserve responded to the crisis, as well as the obstacles they encountered. The writers support their argument with historical comparisons (mostly to the Great Depression), visual aids such as charts and graphs, and a wealth of relevant data. While the book delves into a variety of complex economic issues, it is accessible to all readers.

What factors contributed to the Great Recession?

The Federal Reserve’s decisive response, along with huge government expenditure, averted the US economy from collapsing completely.

The Federal Reserve cut interest rates to zero for the first time in history and initiated a quantitative easing program, in which it bought financial assets to inject additional money into the economy.

The federal government, on the other hand, is launching two major programs to help people in need:

The Struggling Asset Relief Program (TARP) helped to stabilize the economy by allowing the government to buy up to $700 billion in toxic assets, the majority of which was used to bail out troubled banks.
The American Recovery and Reinvestment Act (ARRA) is a federal law that was passed in 2009 to help the economy recover. ARRA was established in 2009 as part of a stimulus package that included tax cuts, government spending mandates, loan guarantees, and unemployment benefits.

These steps were successful in keeping the recession from becoming a decade-long affair, as was the case during the Great Depression. In 2009, the stock market began to recover. Other areas of the economy, however, took several years to recover, resulting in what economists call an L-shaped recovery.

Who is responsible for the 2008 Great Recession?

The Lenders are the main perpetrators. The mortgage originators and lenders bear the brunt of the blame. That’s because they’re the ones that started the difficulties in the first place. After all, it was the lenders who made loans to persons with bad credit and a high chance of default. 7 This is why it happened.

How could the situation have been avoided?

What could have kept the Great Depression from happening?

The $2 trillion Coronavirus Aid, Relief, and Economic Security Act was passed by Congress in March 2020. 11 The economic stimulus measure of 2009 aided in the prevention of a depression by stimulating the economy. 12 Monetary and fiscal policies can prevent another global depression if they work together.

What steps did the government take to address the Great Recession?

The Great Recession lasted from December 2007 to June 2009, making it the longest downturn since World War II. The Great Recession was particularly painful in various ways, despite its short duration. From its peak in 2007Q4 to its bottom in 2009Q2, real gross domestic product (GDP) plummeted 4.3 percent, the greatest drop in the postwar era (based on data as of October 2013). The unemployment rate grew from 5% in December 2007 to 9.5 percent in June 2009, before peaking at 10% in October 2009.

The financial repercussions of the Great Recession were also disproportionate: home prices plummeted 30% on average from their peak in mid-2006 to mid-2009, while the S&P 500 index dropped 57% from its peak in October 2007 to its trough in March 2009. The net worth of US individuals and charity organizations dropped from around $69 trillion in 2007 to around $55 trillion in 2009.

As the financial crisis and recession worsened, worldwide policies aimed at reviving economic growth were enacted. Like many other countries, the United States enacted economic stimulus measures that included a variety of government expenditures and tax cuts. The Economic Stimulus Act of 2008 and the American Recovery and Reinvestment Act of 2009 were two of these projects.

The Federal Reserve’s response to the financial crisis varied over time and included a variety of unconventional approaches. Initially, the Federal Reserve used “conventional” policy actions by lowering the federal funds rate from 5.25 percent in September 2007 to a range of 0-0.25 percent in December 2008, with the majority of the drop taking place between January and March 2008 and September and December 2008. The significant drop in those periods represented a significant downgrading in the economic outlook, as well as increasing downside risks to output and inflation (including the risk of deflation).

By December 2008, the federal funds rate had reached its effective lower bound, and the FOMC had begun to utilize its policy statement to provide future guidance for the rate. The phrasing mentioned keeping the rate at historically low levels “for some time” and later “for an extended period” (Board of Governors 2008). (Board of Governors 2009a). The goal of this guidance was to provide monetary stimulus through lowering the term structure of interest rates, raising inflation expectations (or lowering the likelihood of deflation), and lowering real interest rates. With the sluggish and shaky recovery from the Great Recession, the forward guidance was tightened by adding more explicit conditionality on specific economic variables such as inflation “low rates of resource utilization, stable inflation expectations, and tame inflation trends” (Board of Governors 2009b). Following that, in August 2011, the explicit calendar guidance of “At least through mid-2013, the federal funds rate will remain at exceptionally low levels,” followed by economic-threshold-based guidance for raising the funds rate from its zero lower bound, with the thresholds based on the unemployment rate and inflationary conditions (Board of Governors 2012). This forward guidance is an extension of the Federal Reserve’s conventional approach of influencing the funds rate’s current and future direction.

The Fed pursued two more types of policy in addition to forward guidance “During the Great Recession, unorthodox” policy initiatives were taken. Credit easing programs, as explored in more detail in “Federal Reserve Credit Programs During the Meltdown,” were one set of unorthodox policies that aimed to facilitate credit flows and lower credit costs.

The large scale asset purchase (LSAP) programs were another set of non-traditional policies. The asset purchases were done with the federal funds rate near zero to help lower longer-term public and private borrowing rates. The Federal Reserve said in November 2008 that it would buy US agency mortgage-backed securities (MBS) and debt issued by housing-related US government agencies (Fannie Mae, Freddie Mac, and the Federal Home Loan banks). 1 The asset selection was made in part to lower the cost and increase the availability of finance for home purchases. These purchases aided the housing market, which was at the heart of the crisis and recession, as well as improving broader financial conditions. The Fed initially planned to acquire up to $500 billion in agency MBS and $100 billion in agency debt, with the program being expanded in March 2009 and finished in 2010. The FOMC also announced a $300 billion program to buy longer-term Treasury securities in March 2009, which was completed in October 2009, just after the Great Recession ended, according to the National Bureau of Economic Research. The Federal Reserve purchased approximately $1.75 trillion of longer-term assets under these programs and their expansions (commonly known as QE1), with the size of the Federal Reserve’s balance sheet increasing by slightly less because some securities on the balance sheet were maturing at the same time.

However, real GDP is only a little over 4.5 percent above its prior peak as of this writing in 2013, and the jobless rate remains at 7.3 percent. With the federal funds rate at zero and the current recovery slow and sluggish, the Federal Reserve’s monetary policy plan has evolved in an attempt to stimulate the economy and meet its statutory mandate. The Fed has continued to change its communication policies and implement more LSAP programs since the end of the Great Recession, including a $600 billion Treasuries-only purchase program in 2010-11 (often known as QE2) and an outcome-based purchase program that began in September 2012. (in addition, there was a maturity extension program in 2011-12 where the Fed sold shorter-maturity Treasury securities and purchased longer-term Treasuries). Furthermore, the increasing attention on financial stability and regulatory reform, the economic consequences of the European sovereign debt crisis, and the restricted prospects for global growth in 2013 and 2014 reflect how the Great Recession’s fallout is still being felt today.

How did the government deal with the Great Depression and the subsequent Great Recession?

During times of national crises, Congress has responded by directing federal resources and programs to help struggling Americans. While it is critical to respond rapidly to crises, it is also critical to ensure that federal programs and public resources are used as intended.

The GAO’s involvement during times of crisis is examined in today’s WatchBlog piece, which focuses on the federal response to the Great Depression, the Great Recession, and the coronavirus outbreak.

When the stock market crashed in 1929, precipitating the lengthy period of economic decline known as the Great Depression, GAO was still a relatively young organization.

In reaction to the Great Depression, Congress passed President Franklin D. Roosevelt’s New Deal, which included $41.7 billion in funding for domestic initiatives such as unemployment compensation.

GAO’s workload grew as federal funds were poured into the 1930s’ recovery and relief efforts. GAO, which had around 1,700 employees at the time, quickly ran out of employees and needed to hire more to handle paperwork such as vouchers. Our staff had nearly tripled to 5,000 by 1939.

Our auditors began extending their involvement in overseeing federal programs at the same time. Fieldwork in Kentucky and numerous southern states began in the mid-1930s, and included examinations of government agriculture programs. This steady shift in goal from acting as federal accountants to serving as program and policy analysts would last until 2003, when the General Accounting Office was renamed the Government Accountability Office.

The Great Recession, which began in December 2007, was widely regarded as the country’s worst economic downturn since the Great Depression.

As a result, Congress passed the American Recovery and Reinvestment Act of 2009, which contained $800 billion in stimulus funding to help the economy recover.

GAO was given a number of tasks under the Recovery Act to help enhance accountability and openness in the use of those funds. For example, we conducted bimonthly assessments of how monies were spent by various states and municipalities. In addition, we conducted specialized research in areas such as small company loans, education, and trade adjustment aid.

Despite the fact that the Great Recession ended in 2009, we are still investigating its effects on the soundness of our financial system and related government support. For example, in response to the 2008 housing crisis, the Treasury Department established three housing programs utilizing TARP funds to assist struggling homeowners avoid foreclosure and keep their homes. TARP programs were assessed every 60 days during the recession and subsequent years, and we proposed steps to improve Treasury’s management and use of funds. This effort continues today, with annual audits of TARP financial statements and updates on active TARP projects. In December 2020, we released our most current report.

We’re also keeping an eye on the health of the nation’s housing finance system, which includes Fannie Mae and Freddie Mac, which buy mortgages from lenders and either hold them or bundle them into mortgage-backed securities that can be sold.

Fannie Mae and Freddie Mac were taken over by the federal government in 2008, and the role has remained unchanged for the past 13 years, keeping taxpayers on the line for any possible losses sustained by the two corporations. We wrote about the dangers of this prolonged conservatorship and the need to overhaul the home finance system in January 2019.

Congress approved $4.7 trillion in emergency funding for people, businesses, the health-care system, and state and municipal governments in response to the pandemic. We’ve been following the federal response by, among other things, providing reports on the pandemic’s and response efforts’ effects on federal programs and operations on a regular basis.

Vaccine development and distribution, small business lending, unemployment payments, economic relief checks, tax refund delays, K-12 and higher education’s response to COVID-19, housing protections, and other topics have all been covered in our work.

On July 19, we released our most recent report on the federal response, as well as our recommendations for how this effort might be improved further. In October, we will publish our next report. Visit our Coronavirus Oversight page often because we’ll keep you updated on the federal reaction to COIVD-19 as the situation unfolds.

GAO has played a key role in overseeing federal expenditures and programs during times of crisis, and we continue to do so in more normal times. We produce hundreds of reports each year and testify before dozens of congressional committees and subcommittees on problems that affect our country. We saved taxpayers $77.6 billion in government spending in fiscal year 2020. For every dollar Congress invests in us, we get $114!

How can the government assist in the recovery from the economic downturn?

To impact economic performance, the US government employs two types of policies: monetary policy and fiscal policy. Both have the same goal in mind: to assist the economy in achieving full employment and price stability.
It is carried out by the Federal Reserve System (“the Fed”), an independent government institution with the authority to control the money supply and interest rates.
When the Fed believes inflation is a problem, it will employ contractionary policy, which involves reducing the money supply and raising interest rates. It will utilize expansionary policies to boost the money supply and lower interest rates in order to combat a recession.
When the economy is in a slump, the government will either raise spending, lower taxes, or do both to stimulate the economy.
When inflation occurs, the government will either cut spending or raise taxes, or both.
A surplus occurs when the government collects more money (via taxes) than it spends in a given year.
When the government spends more money than it receives, we have a budget deficit.
The national debtthe total amount of money owed by the federal governmentis the sum of all deficits.

What influence did the Great Recession have?

This RFP has now been closed. The general rationale for the 30 project wins made in 2011 through early 2012 can be found in the original RFP outlined below.

The United States is now two years past the official end of the Great Recession, which lasted the longest and deepest since the 1930s. Although GDP and the stock market have risen since the recession ended in June 2009, the social and economic consequences of the downturn continue to ripple across the US economy. According to labor market data, more than 14 million Americans are unemployed, with 6.3 million of them out of work for more than six months. Another 11.3 million people are working less than they would like either part-time or looking for work but not finding it. Job growth is encouraging but sluggish, and at current rates of growth, reestablishing the pre-recession unemployment rate of 5% could take a decade or longer. Although the unprecedented number of home foreclosures experienced during the recession and its immediate aftermath has lessened, the housing market remains stagnant, with home prices hitting new lows in the first quarter of 2011. State and local budgets have seen huge gaps between revenues and expenditures as a result of the economic downturn, and stock market losses have exposed unfunded pension plans across the country. To attain balanced budgets, governments at all levels will have to undertake a mix of discretionary cuts and higher taxes, as predicted by the long-term repercussions of this recession. Public sector job losses have canceled out 40% of private sector employment increases in the two-year recovery, and government workforces are set to be under pressure for some time to come.

Given the likelihood of continued slow growth, high unemployment, low home values, and severe government fiscal limitations, the Russell Sage Foundation has opted to fund a series of studies on the social and economic consequences of the Great Recession. Long-term economic stagnation will most likely change American institutions and significantly impair many Americans’ life chances. We’re looking for studies that look at these effects across a broad spectrum of social and economic life, including, but not limited to, effects on individual aspirations and optimism about the future; health and mental health; family formation and stability, as well as children’s well-being; the viability of communities, particularly those hardest hit by the foreclosure crisis; the performance of the educational system at all levels; the incidence of crime and the performance of the criminal justice system. The Appendix demonstrates the types of topics that the Foundation is concerned about in each of these social and economic spheres. These are examples of the types of challenges the Foundation is interested in solving, although they are not meant to be exhaustive or exclusive.

In general, the Foundation will consider funding for a variety of projects, including:

Long-term studies on the effects of the Great Recession over the next three to five years. As a result, the effects of the fiscal crisis on state budgets, for example, may take some time to manifest. A comparison of the decisions governments make in balancing their budgets, as well as the implications of those choices, may not be significant for several years after the current crisis has ended. In another area, the consequences of the recession on families may not become apparent until after families have exhausted their resources in dealing with unstable work or housing, and if there are lasting repercussions on children, these may take even longer to manifest.
Analytic research that look at the long-term repercussions of the Great Recession across a variety of social and economic realms. An examination of how the recession affects underprivileged adolescents, for example, could look into the probable link between local variation in unemployment, school dropout, and criminal involvement. Alternatively, a study of older Americans’ labor market participation might look into the consequences of changes in pension wealth and the early receipt of Social Security benefits after a job loss.
Innovative investigations of the Great Recession’s deeper, more subtle consequences on psychological attitudes and social norms. Will the exceptionally high rates of long-term unemployment that have characterized this recession and its aftermath, for example, result in long-term scarring and decreased aspirations? Will high rates of overdue debt and “underwater” mortgages impair financial responsibility in general and undermine default norms? Or will the need to deleverage lead to a more conservative and cautious approach to household financial decisions in the United States? To assess the subjective impact of changed financial conditions, studies of these subjective issues may require a creative combination of qualitative and quantitative methodologies.
Studies of how the Great Recession has affected American institutions, particularly in reaction to economic and other challenges that have arisen during the crisis and its aftermath. Universities, for example, have faced severe budget restrictions as a result of state budget cuts or private endowment losses at a time when student financial aid needs are rising. What has been the impact of universities’ responses to these pressures? To establish generalizations about institutional change, studies of institutional adaptation of topics like these may rely on case studies of specific institutions or the collecting of administrative data across institutions.

In general, we’re looking for creative research projects that go beyond simple trend analysis to look at unintended consequences of the Great Recession. Such study might use comparisons of present conditions with what is known about the results of previous recessions to make testable predictions about the current slump’s likely effects. We expect many of the funded initiatives to employ publicly available data sets, but we also understand that valid assessments of predictions regarding the effects of the Great Recession may require conducting new waves of past surveys or replicating data from other sources that give pre-recession baselines. We are happy to evaluate ideas for restricted data acquisition or collection in such instances. The Foundation’s funding will be limited to research help, data analysis expenditures, and limited release time for analyzing and writing up results in all other circumstances. We anticipate that all working papers and research briefs from projects financed under this initiative will be published (non-exclusively) on the RSF website.

The second round of funding for this endeavor is now underway. After the first round, we sponsored ten initiatives in nine of the appendix’s domains (a description of projects funded in the first round can be found here). We will consider projects from all domains in this round, but we are particularly interested in projects that address the following topics that were not addressed in the first round: changes in attitudes and norms caused by the economic downturn, effects on communities particularly hard hit by foreclosures and/or unemployment, changes in the incidence of crime linked to recessionary conditions, and effects of the fiscal crisis on state and local budgets. We’re also interested in study on the labor market’s performance in the United States throughout this extended era of high unemployment. Although there are no restrictions on the quantity of funding requests that will be considered, cost/benefit analysis will be a major factor in the evaluation of all projects. For your information, prizes accepted in the first round typically ranged from $75,000 to $250,000 for project periods ranging from one to four years.

We ask all academics interested in being a part of this program to send us a letter of inquiry of no more than three single-spaced pages explaining the research topic on the effects of the Great Recession that you would want to do. Your letter should explain and estimate the research expenditures involved, as well as outline and motivate the hypothesis concerning the effects of the Great Recession that you are interested in exploring. It should also specify out the empirical work required and the data sources to be used.

All letters of enquiry will be reviewed by the Foundation’s Advisory Committee, and detailed proposals will be solicited for the initiatives that appear to be the most promising.

Over the last decade, poverty in the suburbs has soared by more than a third. Although poverty rates in the inner city are still greater, the gap is closing. Earlier downturns mainly evaded the effects of suburban areas, but not this time.

What happens when a community’s unemployment rate and foreclosure rate are both high? What effect will it have on housing stock, home values, fiscal capacity, out-migration, and more ephemeral issues such as social capital and social efficacy?
What impact has the recession had on the poor’s regional distribution and concentration?
How would a decrease in residential mobility influence a community’s social infrastructure?

From less than 3% of disposable personal income in 2005-2007 to nearly 6% of disposable income in 2010, the personal savings rate has increased. Furthermore, the total quantity of outstanding consumer credit has decreased for the first time since 1940 as a result of the present crisis.

What has the recession’s overall impact been on personal finances, consumer spending, and consumer confidence?
How did households cut back on their consumption? Are these solutions viable in the event that revenues do not recover?
Have people lowered or raised their savings and retirement contributions? To stay afloat, have families taken out loans against their current investment and retirement accounts? What are the ramifications?
Are these patterns indicating a fundamental shift in consumer and financial behavior?

For the better part of the last decade, crime rates in the United States have remained steady or even decreased marginally. According to some research, those tendencies may be in peril. While the general crime rate in New York City stays steady, the most current statistics shows that the murder rate has increased by 15% over the previous year.

Will crime rates that have been declining or constant in the long run continue in the same path or change?
With fewer resources and higher demands, how well will police, courts, and prison institutions be able to function?
Will states employ early release procedures to reduce the number of people incarcerated and their costs? Is it likely that caseloads for probation and parole will vary, and if so, how will this affect technical violation rates?
What will happen if a larger number of incarcerated people are released into economically challenged communities? What will happen to those people, their families, and their communities?

Families are likely to be affected in a wide range of ways. Job losses and unemployment, one of the most apparent characteristics of the recession, have been linked to higher stress, poorer health outcomes, decreases in children’s academic achievement and educational attainment, marriage age delays, and changes in household structure. According to recent statistics, the number of multigenerational homes increased by 12% between 2006 and 2010.

What impact has it had on marriage, divorce, cohabitation, fertility, and family structure? Has this had a greater impact on some groups than others?
What have been the ramifications for home labor division? Are fathers more likely than mothers to get laid off? Is it true that mothers work more when their fathers work less?
What impact has this had on young adult children? Are more people staying at home longer because of poor career prospects? Do they need more financial and social assistance?
What has been the impact on family function, particularly the quality of parents’ relationships, parent-child connections, and parenting?
What impact has this had on children’s immediate results, such as academic performance, behavior, and delinquency, as well as their long-term life prospects?

States faced overall budget shortfalls of nearly $300 billion between 2009 and 2012 due to a drop in revenue and higher demand for state services. The American Recovery and Reinvestment Act (ARRA) brought temporary relief, but it has finally come to an end.

What policy adjustments have states implemented to overcome substantial budget deficits, given that nearly all states are suffering significant budget gaps? What are the distributional effects of policy changes at the state level?
How will governments allocate the more constrained resources associated with diminishing tax receipts, given that health and prisons have been the fastest rising parts of state budgets over the last several decades? Which states are most likely to enact tax increases rather than spending cuts, and what effect will this have on the state’s economy?
The financial crisis has brought to light the underfunding of pension systems across the country. What are the chances that states will follow through on promised benefits? What effect will it have on state budgets?

Thirty-five states reduced education budgets totalling roughly $8 billion in K-12 and higher education in 2010, and 31 states are seeking more cutbacks in 2011.

What impact do budget cuts have on the delivery of public K-12 education? What impact has graduation rates, class sizes, school closures, and teacher employment and turnover had?
What has happened to the quality of public higher education at all levels, from four-year universities to community colleges?
Has there been a rise in the demand for a college education? Has it changed as a result of the family’s socioeconomic condition or the demography of the students?
What has changed in terms of the net cost of a college education, and what are the implications for students from various socioeconomic backgrounds?

Between 2006 and 2009, the number of home foreclosure filings grew from from 1.2 million to over 4 million per year, with black and Hispanic areas being disproportionately affected. Home losses of this magnitude and concentration are likely to cause more community upheaval and deterioration. Home ownership is also one of the most common means of accumulating wealth in the United States, meaning more financial insecurity for millions of Americans in the short and long term.

Which people and communities have been the most affected by foreclosures? What have been the ramifications for both those who have lost their homes and the localities that have seen the highest rates of home loss?
Have the losses in wealth caused by home foreclosures been allocated differently across different groups?
Have housing policies aimed at reducing home foreclosures been successful? Who has benefited the most?

Job loss is a major source of stress, and it has been linked to a variety of health effects, including an increased risk of heart attack and stroke, diabetes, arthritis, and psychiatric issues, as well as increased melancholy, anxiety, and sleep loss.

What kinds of health and mental-health changes can be ascribed to the Great Recession’s economic uncertainty and its aftermath?
Has there been a psychological shift in the general public’s aspirations, optimism for the future, and expectations for performance and upward mobility, particularly among the young?
What are the health ramifications in neighborhoods that have been impacted especially hard by the recession?
What are the anticipated ramifications of health-care and mental-health service cuts?

As the recession has set in, the number of economic migrants crossing the Mexican border into the United States has dramatically decreased, and internal migration patterns may have transformed as typical employment possibilities for migrants have decreased.

What are the current trends in immigration and internal migration? What will the ramifications be for immigrant communities?
What has been the impact of the collapse of the building industry on internal migration? Is there a link between changes in other industries and changes in internal migration?
How has extended economic suffering and uncertainty influenced Americans’ attitudes toward immigrants, immigration, and the immigration debate?
Are the lasting consequences of the recession affecting return migration patterns?

The official poverty rate rose from 13.2% in 2008 to 14.3% in 2009, with roughly 4 million more people living in poverty than the previous year. Since 1969, nearly every recession has resulted in considerable rises in poverty rates, with the consequences disproportionately affecting children.

What impact has the recession had on the income and wealth of people at various levels of the income distribution? Which individuals and groups have experienced the most transformation? Which assets (for example, retirement assets, property, and investments) have been most sensitive to the downturn if diverse vehicles for wealth generation have been disproportionately impacted?
Has the rate of poverty changed, and who is more likely to slip into or stay in poverty?
Is the greater concentration of incomes at the top of the income distribution a result of the recession?
Has the gradual increase in economic inequality that has marked the United States since the 1970s been aggravated, reduced, or remained unchanged?

A lengthy period of high unemployment, typified by historically high long-term unemployment rates, is expected to have far-reaching implications for the operation of the US labor market, as well as the lives of the unemployed, their families and communities, and the institutions that support them.

How bad are the ramifications of long-term unemployment? Who are the people who are most affected? What policies and programs work best to re-employ long-term unemployed people?
Is the size of the recession a sign of a massive reorganization of the US labor market? To what extent are structural mismatches between skill demand and supply, rather than weak demand, the causes of long-term unemployment?
What geographical areas and localities have the highest levels of unemployment, and why? What are their chances of getting back on their feet?

During the Great Recession, American politics was extremely turbulent, with rising populist fury directed at incumbents blamed for the crisis, significant electoral swings, and new forms of political organizing and fundraising.

In the aftermath of the recession, how are political attitudes, party affiliation, and political involvement changing?
What role do business and government play in producing the problem and resolving it, according to Americans?

State and municipal pension liabilities are anticipated to be close to $4 trillion, while private pension account balances are down approximately $800 billion from pre-recession levels, notwithstanding the stock market recovery.

What effect do pension losses have on pensioners’ projected retirement income? Which groups have been hurt the hardest?
What impact does the loss of pensions and jobs have on older Americans’ retirement decisions? Is there a shift in the distribution of retirement age based on income or education?

Approximately 46% of the 14.6 million unemployed people have been jobless for 27 weeks or longer, and 31% have been jobless for 52 weeks or longer.

How well did the social safety net in the United States perform during the recession and the subsequent period of high unemployment? How has the recession affected the need for emergency and safety-net services? How well have different programs (such as TANF, SSI, and SNAP) responded to increased demand?
Have community nonprofits been able to address any gaps that exist? Is it possible that the impact of the recession on such NGOs has reduced their ability to respond to rising need?
In a high-unemployment environment, what happens to welfare claimants whose time-limited benefits expire?
What was the American Recovery and Reinvestment Act’s impact? What will happen to state welfare programs now that the ARRA is no longer in effect?