Root Causes of Economic Crisis

Hung Tran
Eng 101
Research Essay

Table of Contents:
Part 1: Introduction
Part 2: Analyze causes of the current economic crisis:
        I. Real Estate Bubbl
II. Debt
III. Weaknesses of government’s regulations
IV. The Greed
Part 3: Conclusion and final thoughts

      Whenever you turn on your televisions or access to the Internet, you will be surrounded densely by negative news about the current economic crisis. The root causes of the crisis started from USA and spread out all over the world, which causes financial disasters for all countries, from developing ones to developed ones. The decline of demands, consumption and employment are specific symbols of this economic crisis. Until now, there have been several arguments about the causes of the current crisis, but most economists agree about following major causes: Real Estate bubble, critical debt, and depression of stock markets, weaknesses of government’s regulations and the greed .
      The first cause of the current economic crisis is the one that began in US and continues to destroy the dynamic capital economic system of US: Real Estate Bubble. People keep selling and buying homes with a rocket speed, but the importance is the profits that the owners receive after every trade’s makes a lot of people confused. According to the new surveys that real estate prices has doubled for recently years in states such as California, Texas, and Florida… Imagine the property that you own has the basic values of 200.000 dollars and you sell if for the price 240.000: That is acceptable profit, but the second owner sells it for the price 400.000 dollars. Then, we can realize something is wrong here. The profit that the second owner has is too much, the chain “sell-buy” is in proportion to risk of a bursting bubble, and probably that house’s value can reach 800.000 USD as a result. The last owner probably cannot afford the house price that...