Why Does The Economy Suck?

The current economic crisis has experienced a major global credit crunch globally causing several institutions to default on their loans and as a result several major economic institutions are breaking down. It is ultimately adversely affecting the individuals on a micro level, and several people end up losing jobs due to downsizing and cutting costs. The situation was created in the latter part of 2007 which was identified as subprime mortgage crisis. Banks and financial institutions had lent money to individuals and organizations that did not have the required capacity to repay the loans. As a result they defaulted direly affecting the credibility of financial institutions and devaluing their stocks and securities. As a result, a credit crunch was experienced globally which has shaken many conglomerates and financial institutions, the resulting crisis also affected all those countries and enterprises which were dependent on the American economy.