There is general agreement among academics, economists, and policymakers about the U.S. housing market bust having caused the U.S. subprime, financial, economic crises in 2007-2009. However, consensus on what caused the U.S. housing market to burst was not obvious. Now academics, economists, and policymakers have started debating on the impacts of the Global Green New Deal on the global economic recovery in general and the debate on the impacts of the American Recovery Reinvestment Act (ARRA) on the U.S. economic recovery in particular. The debate on the ARRA's impacts has even become one of the major debate issues of the 2012 U.S. presidential election. Yet, without the deep understanding of the true cause of the past crises, these debates will remain futile. This paper is devoted to investigate the real cause of the U.S. subprime, financial, economic crises. It will first review related literature, and then examine a number of key economic factors related to oil production and consumption. The resulting insight will help answer the question on the impacts of ARRA because the knowledge of the fundamental cause of these crises will help determine what the most effective solutions to the economic recovery should be and examine if ARRA succeeded to deliver these solutions.
Peter Yang, Case Western Reserve University, United States
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