In 2007 it took seven economists 11 months to decide what should have seemed obvious given all the foreclosures, bank failures, and layoffs that the United States is officially mired in a recession. Many economists believe the current downturn could be the worst since the recession of 1980-1982, when the United States unemployment rate soared above 10%. There are many reasons for the recession of 2008, but mostly because the irrational exuberance in the housing market led many people to buy houses they could not afford because everyone thought housing prices could only go up. In 2006, the bubble burst as housing prices started to decline. This caught many homeowners off guard, who had taken loans with little money down. As they realized they would lose money by selling the house for less than their mortgage, they foreclosed. An escalating foreclosure rate panicked many banks and hedge funds, who had bought mortgage-backed securities on the secondary market and realized they were facing huge losses. By August 2007, banks became afraid to lend to each other because they didn't want these toxic loans as collateral. This led to the $700 billion bailout, and bankruptcies or government nationalization of Bear Stearns, AIG, Fannie Mae, Freddie Mac, IndyMac Bank, and Washington Mutual. By December 2008, employment was declining faster than in the 2001 recession.
No industry took a hit like the retail industry. Compared to the 2009 Store Closing list, the number of stores scheduled for closure in the United States in 2010 seems small, but is still not insignificant. The recovery of consumer spending in the new decade was predicted to be slow because of high unemployment, and many supply chains continued to respond to recessed retail consumption with store closings. Many experts believe that the number of retail establishments per capita in the United States was excessive