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APRIL: An inflation report causes the collapse of the technology bubble
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The Department of Homeland Security was created after Enron (an American energy company) lied to their shareholders and hid their mass debt. Their shareholders lost $60 billion dollars.
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September:
- The 9/11 attacks shaped financial events for the rest of the decade
- The 3rd time in history that the New York Stock Exchange was shut down (9/10- 9/17)
- $60 million in insurance losses and 1800 small businesses were displaced or destroyed in Manhattan after the Twin Towers fell
- Huge financial losses -
March: the market reaches lows not seen since 1997 and 1998 due to Enron scandals and the 9/11 attacks in 2001. This also led to an American led counter terrorism campaign called "War on Terror"
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As an attempt to help to economy out of recession, Jobs and Growth Tax Relief Reconciliation Act was created. It lowered the the maximum individual income rate to 15%. This gave more money to businesses, investors, and consumers.
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On June 1st, the Central Bank announced an increase in its base rate. In November, President Bush is re-elected.
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Hurricane Katrina and Rita caused damage to the U.S Refinery in the Gulf of Mexico which caused oil and gas prices to spike.
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Hurricane Katrina & Rita: the biggest natural disaster in U.S history occurred. There was $200 billion in damage, 400,000 jobs lost, 275,000 homes destroyed.
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China's GDP rises, people predicted that if their growth rate continued, then their economy would be better than the United States' in four to five years. Also, the bombing of the golden- domed mosque in Samarra and Sunni terrorist attacks killed many people, including 800 American troops. The GDP decreases to 2.9% from 3.3%.
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The housing bubble bursts which resulted in the collapse of the financial system.
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Bernard Madoff defrauded his investors $18 billion dollars. This fraud along with the sub- prime mortgage crisis caused the deepest economic downturn world wide since The Great Depression.
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America was in recession. The unemployment rate rose and business activity decreased. In December the recession ends. The main cause of the bursting of an 8 trillion dollar housing bubble starting in 2007.
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The Great Recession finally ends and we transition from recession to recovery. But, the unemployment rate remained very high and foreclosures continued. Obama passed a $858 billion tax cut which had several benefits on the people who were struggling to recover.
