Economic Crisis

ECONOMIC CRISIS

ABSTRACT

This paper will define crisis and economic crisis and will discuss what has been done by the government in trying to boost the economy, how an economic crisis can drastically affect an individual’s life and well-being and why people who lack resources are most vulnerable to additional losses. It will look at the financial, emotional and physical changes that take shape in individuals when resources are lost and why it affects the poor and middle class more dramatically in relation to the wealthy and very wealthy. We will also look at unemployment rates and the economic bail-out of 2007 in addition to psychological stress and the effects an economic crisis can have on the physical well-being of an individual; how fear incapacitates an individual with limited resources, and why loss cycles are more impactful and more accelerated than gain cycles.

Internationally, we have been suffering through a global financial crisis which started to show its effects in the middle of 2007 when around the world stock markets fell, large financial institutions collapsed or were bought out, and governments in even the wealthiest nations had to come up with rescue packages to bail out their financial systems (Shah, 2009). Ia. Crisis has been defined as an emotionally stressful event or traumatic and unexpected change in a person’s life (Ünal-Karagüven, 2009).

According to the Business Dictionary, an economic crisis is a situation in which the economy of a country experiences a sudden downturn brought on by a financial crisis (Economic Crisis, (n.d.).

An economic crisis is an uncertain time for us all. During this recent economic crisis where unemployment rates are far above the norm even those with surplus resources are afraid to borrow money. As of June 2010 the national unemployment rate was at nine and half percent, whereas in June 2000, the national unemployment rate was only at four percent (Bureau of Labor Statistics, 2010) and the number of...