Property asset bubbles occur every time during a normal business cycle and especially during boom times but the severity of the current downturn and subsequent bursting is something unique. Many had compared its deleterious effects to the Great Depression of the 1930s when the stock market collapsed and millions were thrown out of work.
The financial crisis led to a tightening of credit such that businesses find it hard to borrow money to finance expansion plans. This in turn caused an economic contraction in terms of employment and industrial production, leading to a vicious downward cycle that has continued until today although it had slowed down a bit. The end result is that once prosperous families find themselves on the bread line when their primary breadwinners lost their once secure jobs. It is as if the whole sky had fallen down on them and their own version of the American dream had turned into a nightmare of waiting in job lines. A cherished dream of self-worth was destroyed by these job losses when a primary sense of achievement is how much one can afford to buy in the first place. An individual’s self worth was once measured in fame and personal wealth but not anymore today.
America’s social welfare system is called a residual-type of program compared to other Western industrialized nations where they are a central part of government welfare policies. By residual, this means aid is given only to those who were very poor, to those who were chronically unemployed, the sickly or the elderly. In other words, the social welfare programs are intended for individuals who cannot make it on our free market system of competitive employment. Welfare aid is given only temporarily to supposedly those people who were down on their luck and had fallen on hard times. The other industrialized countries of Europe (especially Scandinavian countries like Sweden) operate