By: Nicole Nelson
Although there is not one specific cause to the financial crisis that occurred in 2008, there is speculation on root causes of the crisis. Many people are placing the blame solely on the housing market and the fact that mortgages were being given to people that may not have been able to pay for them. Others place the blame on politics and their role in government banks, interest rates, etc. Again, no one is right or wrong in their opinions, but a financial crisis does not occur just because of bad mortgages or bad interest rates. Financial crisis’s happen because bad financial decisions were being made by a lot of people for a significant period of time. Some of the reasons that caused the crisis was “cheap credit” was being given. As mentioned, people were being loaned money to invest in real estate or other areas when they didn’t have the money to. Also, companies were buying out other companies and taking out huge amounts of debt to do so without actually creating any value. Mortgage brokers were also authorizing mortgages and then selling them off without actually taking any responsibility if they could not be paid. Overall, there was not one simple reason that the United States got into the position it is now, various circumstances caused us to be in the financial crisis we are currently in.
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