The U.s. Economic Downfall in The Early 2000’s and Different Types of Economies

In early 2000 we experienced a sort of depression with loosing major businesses such as Chrysler and General Motors. With the downfall we seen the housing market skyrocket for a short period of time due to Subprime mortgage loans, where it was easy for people with little to no credit or documentation to receive a mortgage loan. The prices of these homes rose while demand was high. This did not last long because people ended up owing more to their lenders than the actual homes were worth and the foreclosure rate increased immensely. This contributed to businesses as I stated before going under not being able to borrow money from banks and the government. In the last couple of years our economy has gotten better and the housing market has leveled out.

Economy is a financial and social system of how resources flow through society, from production to distribution, to consumption and there are four major types of economies, Capitalism, Socialism, Communism. The Capitalism or “Free enterprise” economy is what we are used to as it is what we have in the united states and is a political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state. Socialism is an economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community. Lastly, Communism is a theory in which advocating class war and leading to a society in which all property is publicly owned and each person works and is paid accordingly to their abilities and needs. No single measure captures all the dimensions of economic performance and all work differently for the regions that exercise them.

Within the economy are the businesses that support them, and we learned about the four major types of business ownership Sole Proprietorship, Partnership Corporation and Limited Liability Company. All four types have their advantages and disadvantages. In today’s day in age in order for any business to strive relies heavily on a business’ ethical standard. We as consumers are a lot more mindful in what a business is and make our decisions on who we purchase from solely on what a business stands for. Due to this business are now regularly preforming social audits, which tells said company how well they are meeting their ethical and social responsibilities.

Now the type of business that most wish they could pursue, Entrepreneurship. Entrepreneurs are people who risk their own time, money and other resources on their own business. While you can make a profitable living working for someone else your chances of being seriously wealthy scientifically increase with owning your own business. You are solely responsible for your success or failure while answering to only yourself. . There are multiple was to find funding if you don’t have the money to start by yourself and they are: Personal resources, Loans, Cofounding, Angel Investors, Venture Capital and even Partnership. There are a lot of pros and cons with this route of business, but if you have the means to go this route and choose something you love to do there is very little downside to owning your own business. A lot say that even failing your first couple of times is a “learning experience”. You just need to educate yourself and in every aspect and create a business plan.

Small businesses, believe it or not, make a huge impact in today’s economy. They compromise 99.9% of all businesses in the U.S. and account for 48% of all private sector employees. Small businesses are the backbone of urban economies with creating new jobs, fueling innovation, and vitalizing inner cities. around the U.S. I also think it’s easier for a smaller company to meet ethical and social responsibilities rather than a bigger national company. I hope one day I will be able to start my own business and contribute to our economy and society.