A common idea in society is that we should learn from our past mistakes, otherwise history will repeat itself, and that is most certainly true. For example, when the stock market crashed in 1929, President Hoover believed that it wasn’t the government’s job to fix the economy. Therefore, he did little to nothing to solve the money issue. This resulted in what is known as The Great Depression. The important lesson learned from this is that although doing nothing is a choice, that doesn’t mean that the consequences are not going to be severe. If we don’t learn from this grave mistake, our nation could be in huge trouble.
An excellent United States history teacher once taught our class a valuable lesson regarding the cycling of the economic state in our country. He said that it is a process that occurs over a long period of time: our country is at the top and our economy is great. That usually doesn’t last long as we fall into a recession, which leads to a depression. However, the economy will fix itself, and we will move from a depression to a recession, back to the top again. So, to answer the question, I do think that another housing disaster is unavoidable. It’s a cycle, just like our economic cycle. However, I think that it’s important that people learn from the past disaster so that we can get out of that “depression” state. There were, of course, events that led up to this great disaster, and it’s crucial that we don’t ignore what happened that was a major factor in the cause of this. In August 1981, The Tax Reform Act of 1981 was enacted, which helped create a demand for buying real estate. I guess one solution to that would be to be wary of the laws passed by our government and to not all of a sudden request to take out a whole bunch of loans to pay for homes in the first place. Another factor that played into the housing disaster was the elimination of restrictions on minimum numbers of savings and loans stock holders. This made purchasing a loan easier. This could have been an excellent example of what helped caused this event. We learn from this that it is vital that we don’t limit restrictions. Restrictions are put there in the first place in order to keep things running smoothly and efficiently. …show more content…
Many savings and loans stayed open, banks made more bad loans, and the losses continued to accumulate. The thing that people could take away from this is that if another crisis should occur (which it will), then as soon as they know what the cause of the crisis is, then they should cease what they are doing and not make the same unfortunate mistake of other banks.
It is also important that we remember that credit scores and economic background checks might be necessary. A root of the problem was that banks were giving loans to anybody and everybody, regardless of what they looked like or what their economic past might have been. I’m sure today, that won’t be a problem, since banks are very cautious about who they give their loans to, but in the middle of a crisis, their minds might get clouded with the idea of earning more money being their sole
An excellent United States history teacher once taught our class a valuable lesson regarding the cycling of the economic state in our country. He said that it is a process that occurs over a long period of time: our country is at the top and our economy is great. That usually doesn’t last long as we fall into a recession, which leads to a depression. However, the economy will fix itself, and we will move from a depression to a recession, back to the top again. So, to answer the question, I do think that another housing disaster is unavoidable. It’s a cycle, just like our economic cycle. However, I think that it’s important that people learn from the past disaster so that we can get out of that “depression” state. There were, of course, events that led up to this great disaster, and it’s crucial that we don’t ignore what happened that was a major factor in the cause of this. In August 1981, The Tax Reform Act of 1981 was enacted, which helped create a demand for buying real estate. I guess one solution to that would be to be wary of the laws passed by our government and to not all of a sudden request to take out a whole bunch of loans to pay for homes in the first place. Another factor that played into the housing disaster was the elimination of restrictions on minimum numbers of savings and loans stock holders. This made purchasing a loan easier. This could have been an excellent example of what helped caused this event. We learn from this that it is vital that we don’t limit restrictions. Restrictions are put there in the first place in order to keep things running smoothly and efficiently. …show more content…
Many savings and loans stayed open, banks made more bad loans, and the losses continued to accumulate. The thing that people could take away from this is that if another crisis should occur (which it will), then as soon as they know what the cause of the crisis is, then they should cease what they are doing and not make the same unfortunate mistake of other banks.
It is also important that we remember that credit scores and economic background checks might be necessary. A root of the problem was that banks were giving loans to anybody and everybody, regardless of what they looked like or what their economic past might have been. I’m sure today, that won’t be a problem, since banks are very cautious about who they give their loans to, but in the middle of a crisis, their minds might get clouded with the idea of earning more money being their sole