Without any perplexity, it can be unanimously admitted that the seven years of dreamy enchantment cost the American economy severely and dearly.  The consumer expenditure is at attrition level and the housing business has entered into recession. Furthermore, the stock market is fluctuating. This type of financial crunch could have been checked and preventive if anyone had taken some pre-emptive measures applying some practical conscience and readiness of mind.

The poor governance and ineffective economic policies are some of the vital factors which are responsible for the downfall of the country’s economy which nurtures the possibility of the credit crisis in America.  American GDP is set at 70 percent consumer expenditure. That means that wages are bound to augment crossing the rate of inflation or the economic infrastructure won’t grow. If someone has the ardent wish to have a strong economy wages are bound to grow at pace with the productivity so that workers are able to purchase the products they give rise to. Both Greenspan and Bush administration are well concerned regarding this effect but they opted for keeping it hidden behind any easy credit smokescreen with the sole purpose of weakening the dollar. They took such decision to offshore myriad industries and outsource three million manufacturing employment schemes. They also took such wrong decision to strengthen illegal war maintaining the flow of $800 billion existing account deficit into American equities and Treasuries.

 It is a matter of grave concern that after the transfer of political power to Bush administration in 2000 there has been no particular improvement which can energize the country’s economy solving the problem of credit crisis. There is an ever expansion of personal and corporate debt energized by a structured finance system that metamorphoses liability or sub-prime loans into securities increasing their value by way of leveraging.