U.S financial crisis - Term Paper Example

It was a steady and gradual pace that caught up that finally brings the entire structure crashing down. Some say that it is already over while others argue that it is far from being so and that it will take years to be able to say the country has rid of it completely. Regardless of these arguments, it is of the most import that causes be analyzed to provide for an effective solution to the ailing financial state of the country. There is of course the palpable difference between the dynamics of the economy years ago to the current intricacies of today’s government laden with globalization and a multifaceted area that encompasses the interlocutory status of a country to many others.

The crisis as experienced today can be traced back decades ago to the time of Pres. Ronald Reagan and the heyday of capitalism. This is not a direct attack on the merits of Reaganism but merely serves proof that the way business was done then does not necessarily carry with it its applicability decades after. The sheer size of businesses today renders this trite from the time when it was at its prime efficiency. This ideology as Francis Fukuyama states in his article titled ‘The Fall of America, Inc.

’ carries two sacred concepts, “first, that tax cuts would be self-financing, and second, that financial markets could be self-regulating (p. 26). The demand for the dollar by majority of international traders allowed the government to push over as inconsequential the budget deficit. The latter, as we know it, is the very essence of free-market capitalism. The problem reverts back to the issue of housing in the United States. The 1980’s created a mentality for the need of homeownership as definitive of self-identity among Americans.

They have then identified themselves as investors and real property was the trend of investment (Shiller, p. 29). “In Britain as it was in the United States, it wasn’t just owning a home. It was being a better person” (Karabell,