In over half a century since the World War II ended ten recessions succeeded it. However, The Great recession of 2007 was the longest, deepest, widest and most severe of them all, as it lasted from December 2007 through June 2009. The collapse of the housing market in America, which is known as the Sub-prime mortgage crisis was determined to be the main cause of the great recession of 2007. This sub-prime mortgage crisis drastically affected millions of Americans as it increased unemployment, which led to an increase in poverty, thus prompting the government to respond.

Mr. Claude Gerald, Retired Economics Lecturer at the Montserrat Community College, stated “The Financial Crisis of 2007 and 2008 in North America was the main cause of the recession.” He further mentioned that the year 2007 initiated an era of turmoil as the financial crisis in the United States housing market began, which led to one of the worse financial meltdowns since the great depression in 1929. Mr. Gerald explained that In the housing market, persons who wished to purchase a house but unfortunately have a credit score typically below 620 would have been issued Sub-prime mortgage loans, as they may not have been able to acquire finance otherwise considering that sufficient collateral and a healthy credit history is required. These mortgages however were affiliate with high interest rates due to the likelihood of lenders being unable to acquire repayments in full as these persons have a history of making late payments or dishonouring credit requirements. The issue of these mortgages ultimately backfired on financial institutions as homeowners defaulted their repayments (Gerald). Dr. David Barker, Professor of Economics in the Graduate School of Business at the University of Chicago stated, “These borrowers began defaulting when interest rates rose and economic growth slowed and the