Tuesday, December 1st, 2009

How has the Credit Crunch caused so much unemployment?

credit crunch
alan213006 asked:


How has the Credit Crunch caused so much unemployment? I don’t really understand it. I know the part about the banks not lending any more money, but is that the main reason why so many people have lost their jobs? Or is it a combination of things that has led to mass unemployment? And is the UK the worst affected by the Credit Crunch? To see all the job losses every day, you would think so!

So come on, everybody, enlighten me more about the Credit Crunch!

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This entry was posted on Tuesday, December 1st, 2009 at 12:00 am and is filed under Credit Problems. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

7 Responses to “How has the Credit Crunch caused so much unemployment?”

rennickelizabe Says:
December 1st, 2009 at 4:14 pm

i think the businesses can t get any more money from the banks to expand and people are not paying their bills due to lack of money also no one can either import or export

blogsjulie Says:
December 3rd, 2009 at 1:47 am

i think the aliens have caused the credit crunch!

Paco C Says:
December 3rd, 2009 at 11:17 pm

where has all the money gone?
and then they say money dont grow on trees well then why do banks have branches
anyway here is my 2 cents worth but i only get a penny for my thoughts anyway why is not 11 called onety one?
can i have the pints now pleese as its chritmas and i savin up for a lexus car

retiredroadie Says:
December 5th, 2009 at 9:24 am

The whole world runs on credit… businesses borrow it to expand or pay their employees… people use it to buy cars and homes… when there is NO CREDIT everything just grinds to a hault… and people lose their jobs and homes and cars because THERE IS NOT CREDIT… it’s the engine of the economy and when credit stops, the economy stops.

David A Says:
December 6th, 2009 at 11:08 pm

Small businesses, especially, rely on “line of credit” to operate their company’s. With those lines of credit diminishing or, in some cases, not there anymore, businesses are forced to close the doors or lay off employees and downsize. Some types of small businesses, for example building contractors, rely on credit to not only meet their construction costs until completion, but also the payroll. In this direct case, employees are instantly unemployed due to no money to proceed.

robert d Says:
December 9th, 2009 at 7:21 am

There is no simple answer. This problem didnt just start, it began during the Clinton years starting with Fannie and Fredie and the greed machine of the congress. #1 the inability to pay down personal C.Card debt.This will change our spending habits when needs out way wants.Wants are usually bought on credit i.e.100 inch flat screen,wave runners,las vegas Now only cash for the escentuals. The build up of products not selling,cutting overhead begins with workers salaries.Being on the wrong side of commodity’s pricing for products, and 100s of other reasons.Simple answer to many things and no $s.

ady Says:
December 11th, 2009 at 8:17 pm

Businesses need money from banks to maintain their cash flow and working capital,i.e, to pay wages for staff, pay suppliers, pay utility bill, etc. They get this money by means of credit from banks and can be in the form of an overdraft facility or a loan. Because they can’t get credit, they cant pay the wages and have to lay off staff. The staff cut down their spending and as a result, other businesses suffer since demand for their products/services is cut and then they have to lay off staff. This leads to a downward spiral which sees many people lose their jobs. You can read more on my blog.

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