Background Information
Between December 2007 and June 2009, Americans experienced the most prolonged and severe recession ever since the World War II due to what was known as the subprime mortgage crisis. (Grusky, Western & Wimer, 2011). The subprime mortgage crisis forced millions of homeowners and their lenders of mortgage to have their homes valued less compared to the total loan amounts. The real estate, banking, and financial markets were significantly affected by the Great Recession. There was a fall in the Gross Domestic Product by 4.3% which was recorded as the most significant drop in the era after the world war.
There was a drop in the rate of unemployment from 5% to 10% between the periods of December 2007 to October 2009. The Great recession similarly had significant implications in the financial sector (Verick & Islam, 2010). The prices of homes dropped by an average of 30% between the mid-2006 and mid-2009. During this period, there was a decline in the net worth of the nonprofit organizations and US household by about 14 Trillion dollars.
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Deepening of the financial crisis led to the implementation of appropriate measures aimed at reviving the economy (Verick & Islam, 2010). Such measures included fiscal stimulus program and tax cuts resulting in the 2008 Economic Stimulus Act and the 2009 American Recovery and Reinvestment Act. The United States Federal Reserve reduced the rates of the federal funds to 0-0.25% in December 2008 from 5.25% that was in place in September 2007. Businesses received financial incentives to enhance capital investments in what was known as "Stimulus Package." Despite the interventions, there was the collapse of Bear Stearns, a giant investment bank in March 2008. Lehman-Brothers, which was a financial behemoth declared bankruptcy after a few months.
The Fed lent the insurance company AIG (American International Group) about 85 billion dollars to ensure it remains afloat. TARP (Troubled Asset Relief Program) was approved by President Bush to prevent the collapse of financial banks and companies by buying their assets (Verick & Islam, 2010). It was a matter of debate as to whether the initiatives were taken really brought the Great Recession to an end. The Great Recession had significant influence in my life regarding personality, social life, and professional aspirations.
Analysis of the Event and its Effect on my Life
The great recession happened when I had just started my third grade in a prestigious private school. I was one of the richest students in school, thanks to my father who was in a senior managerial position in Bear Sterns. Being the only child, he used to drive me to school. I was a proud and fun-loving person who would spend money lavishly without being considerate. The school itself was one of its kind, and it was known to offer the best education. The great recession hit me hard when I went back home from school and found that my father had lost his job (Verick & Islam, 2010). The bank was his only source of income, and he had no other source.
It meant that all the fun I had with my friends had to come to an end. I lost all the respects that the other students had for me, and my friends no longer wanted me in their company because I was out of their league. I was depressed but then I realized I could not change the situation at that time. Our financial woes deepened as my father used up all his savings which forced us to sell most of our properties to meet our daily financial needs (Cherlin et al., 2013). We also had to sell the only house we had lived in for many years. It was indeed challenging to adjust to the changes, but with time I adapted to the new environment, and this changed my personality from a fun-loving person to a person who was serious, quiet and developed some independence. My family used to argue most of the time because of financial disagreements. Ever since my father lost his job with the bank, he became so stressed that he went into drinking. He would come home late after a night out with his friends and pick an argument with my mother (Cherlin et al., 2013). I would lock myself in my room as they argued or sometimes fought.
My father finally decided that he has had enough and left us. I realized that this was the beginning of my life with my mother, and I had to be ready for this. I changed to a more affordable school since my former became too expensive for me. I could not openly interact with my new classmates as I became this quiet boy sitting at the back. I did my assignments on my own and never engaged in discussion groups. I registered low grades because I had not mentally adjusted to my new school. My teachers were concerned, and so they had to call my mother and explain to her how I behaved. Together with the teachers, they encourage me to change my attitude about the school and work hard (Sherman, 2013). My mother reminded me of what I had gone through since my father lost his job and I took it upon myself to put more effort in studies.
Unfortunately, this did not improve my social life much because I came to love reading as opposed to spending time with people. During my free time, I would read science books. My classmate started calling me a nerd, a word that I used to hate when I was in my former school. I came to like Mathematics to the point that I became one of the best performing students. The subject seemed too difficult for me in my former school. I only dreamt of becoming the chief executive officer of some big company which did not require deep knowledge in Mathematics. My father was my only inspiration and I never thought I would change my future career to a scientist. The Great Recession was perhaps meant to build up my passion for science (Sherman, 2013). I thought that as long as someone had scientific knowledge, he did not have to be employed by some company that may one day collapse and force the person to lose his or her job like my father. So, my journey to become a scientist began, and I'm now on my mission to becoming the next Albert Einstein.
Conclusion
America never expected The Great Recession. No one saw it coming, and its impact will be felt for many years to come, especially for those whose lives were forced to change in terms of education, profession, social interaction, and health. My father lost his job and later left us, but I found it essential to pick up the pieces and move on with my life while focusing on my future.
References
Cherlin, A., Cumberworth, E., Morgan, S. P., & Wimer, C. (2013). The effects of the Great Recession on family structure and fertility. The Annals of the American Academy of Political and Social Science , 650 (1), 214-231.
Grusky, D. B., Western, B., & Wimer, C. (Eds.). (2011). The Great Recession . New York, NY: Russell Sage Foundation.
Sherman, J. (2013). Surviving the Great Recession: Growing need and the stigmatized safety net. Social Problems Journal , 60 (4), 409-432.
Verick, S., & Islam, I. (2010). The great recession of 2008-2009: causes, consequences and policy responses. Boston, MS: Cengage Education.
