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Issue Guide: The United States and the Global Financial Crisis

May 2009

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The global financial and economic crisis started in the United States. Falling U.S. housing prices led to major problems at U.S. subprime lending outfits; in turn, this prompted problems at major U.S. financial institutions and a broad credit squeeze, which affected the global economy. As the crisis grew, reticent U.S. consumer spending also weighed on global economic prospects, and large-scale spending plans put forth by the government raised fears that the crisis could cause large budget and current account deficits to balloon further. Yet despite the United States' central role in the crisis, the latter part of 2008 saw a rise in the value of the U.S. dollar relative to other currencies, as investors fled from more risky investments into the dollar, which they considered a relative safe haven. Still, concerns remain about a long-term decline in U.S. power and influence. Washington has also served as one of the main coordinators for the international response to the crisis. Then U.S. President George W. Bush, along with French President Nicolas Sarkozy, called the first in a series of G-20 heads-of-state meetings responding to the crisis, hosting a summit in Washington in November 2008. Then, ahead of an April 2009 follow-up summit, U.S. President Barack Obama made a strong push for a coordinated global increase in stimulus spending, though he met pressure from Germany, France, and other countries on this front, and the April meetings did not produce agreement on stimulus.

The following is a list of resources on how the crisis has affected the United States.

The Seeds of Disaster

The Bailout Plan

Picking Up the Pieces

Long-Term Ramifications

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