In 2008, America faced an economic recession, so awful it has been named The Great Recession. The economy crashed, unemployment rates rose higher than ever, and real estate prices plummeted. Known as a global recession, it does not only affect the U.S., but other developed economies as well. The government struggled to implement economic policies and legislations to bring the state of the nation back on track. Typical monetary and fiscal policies have been enforced in general recessions. However the unusual steepness of this recession have required these steps to be taken either further (Heakal). Throughout this process, the many branches of government in the two administrations, as well as the citizens themselves, attempt to work together to end this recession

An unfortunate outcome of the recession has been unemployment. With the downfall of the economy, millions of Americans lost their jobs and unemployment rates rose higher than ever. In order to solve this problem, the executive proposed a stimulus plan with the intention of reviving the economy. Known as the American Recovery and Reinvestment Act of 2009, the Obama administration hoped to create and save more jobs by giving money directly to households and giving assistance to those unemployed (“The Recovery Act”). Also, to ease the unemployment rate, the government encouraged people to rejoin the workforce. By doing so, they formed the Earned Income Tax Credit which provides subsidy to earnings with a maximum earning of $5,236. Since people are receiving benefits from the government, they should be more motivated to get a job at any given wage, therefore bringing relief to the crisis (Neumark).

Another effect of the recession had been inflation. Under Bush’s second term as president, inflation rates raised to a record levels. The primary policy Bush passed during his administration regarding the recession is the Economic Stimulus Act of 2008. The act was passed by the House of Representatives with the intention of providing stimuli to boost the economy and ameliorate the recession. The act mainly provides tax rebates and incentives and increasing limits for mortgage. The government hoped that it would stimulate business investment, boost consumer spending, alleviate the home mortgage crisis, and decrease the risk of inflation (Williams).

Several roles come into play when it comes to making economic policies. Linkage institutions, the Bureaucracy and the Executive all cooperate together to form what is called the Iron Triangle, which played a part in solving the issue of recession. First of all, Linkage Institutions, including interest groups and the media provides information and support to the Bureaucracy. For example, Citizens for Tax Justice is a group that supports tax cuts especially during the recession. They advocate fair taxation for middle and lower class families, requiring the wealthy to pay their share and reducing the federal debt (“Background and History”). In order to pass legislation and policies that would support their mission, they would provide campaign contributions to the executive, who would then pass legislation regarding their point of view and support their corresponding Bureaucracy's budget who would then pass favorable rulings.

The Bureaucracy, which includes the treasury department of the US cabinet pays close attention to the opinions of the constituents. They pass on this information on to Congress, who utilizes and analyzes the approval ratings of certain pieces of legislation and policies. In return for this information, the executive approves budget requests to the treasury who can then use it the money to pass rulings that satisfy the linkage institutions. The executive also rewards these institutions by passing policies favorable to them. Therefore, each agency and department do not work separately in passing economic policy to end the recession, but instead they all link together.

In a democracy, it is important to have political efficacy, which is why citizens help to contribute to the process of policy making. Every time the executive attempts to pass a piece of legislation or policy, they must pay attention to the approval of the constituents. Without public support, the legislation most likely will not get voted through. Research has shown that Congress is more likely to vote according to the public’s opinion rather than the executive’s. Also, having a strong relationship between government and the people has many benefits: improving the quality of the policy-making process, integrating public input to the process, and strengthening public trust in the government (“Engaging Citizens in Policy Making: Information, Consulting and Public Participation”). Therefore garnering support from the citizens and making sure that citizens are actively participating is essential to policy making.

Obvious the 2008 recession brought a countless number of consequences. With unemployment rates higher than ever and inflation the highest we’ve seen in years, we’re still taking the steps towards recovery. The many government institutions as well as the citizens have been piecing together the actions necessary to find a solution once and for all. The recession is not over yet, but with oncoming legislations and economic policy, we might see an end to it all soon.

Work Cited
“Background and History.” ctj. Citizens for Tax Justice. n.d. Web. 17 Dec. 2013.
“Engaging Citizens in Policy Making: Information, Consulting and Public Participation.”

oecd. OECD. n.d. Web. 17 Dec. 2013
Heakal, Reem. “What is Fiscal Policy.” investopedia. Investopedia. 9 Oct. 2013. Web. 17 Dec.

2013.
Neumark, David. “Job Creation Policies and the Great Recession.” frbsf. Federal Reserve

Bank of San Francisco. 19 March 2012. Web. 17 Dec. 2013.
“The Recovery Act.” recovery. n.p. n.d. Web. 17 Dec. 2013.
Williams, Roberton. “What is the Economic Stimulus Act of 2008.” taxpolicycenter. Urban

Institute. 13 March 2008. Web. 17 Dec. 2013.