Every few years, countries experience an economic decline that is commonly referred to as a recession. In recent years, the United States has had to overcome the most devastating global economic difficulties since the Great Depression. This period “a period of declining GDP, accompanied by lower real income and higher unemployment” has been called the Great Recession (McConnell, 2012 pG-30). This paper will address the issues that led to the recession, discuss the strategies adopted by the government and the Federal Reserve to alleviate the crisis, and examine the future prospects of the U.S. economy. By examining the nation's economic difficulties during this period (2007-2009), it will be concluded that the current macroeconomic situation has to do with unemployment, which is a direct result of the recession. It can be argued that the economic hardships of the Great Recession began when interest rates were lowered by the Federal Reserve. This caused a bubble in the real estate market. Housing prices collapsed, housing prices collapsed, so thousands of borrowers could no longer afford to pay their loans (Koba, 2011). The bubble forced banks to make real estate loans with unreasonably high risk rates. The banks' response caused a decline in the quantity of homes purchased and “a crisis involving mortgage loans and the financial securities built on them” (McConnell, 2012 p.479). The effect on the economy was catastrophic and caused a “pandemic” of foreclosures that affected tens of thousands of homeowners in the United States (Scaliger, 2013). Eventually the debt burden became unsustainable and the US crisis worsened as the long-term effect on bank lending would affect not only the housing market, but also the job market. What initially appeared to be an economic recession turned into a brutal crisis, and all eyes were on the government and the Federal Reserve to help the economy. With the enormous amount of debt the economy was facing, the Federal Reserve stepped in and bailed out the banks in an attempt to iron out the economy's financial difficulties. Surviving banks took precautionary measures, making it difficult for businesses and consumers to obtain loans (Love, 2011). This leads to business failure and fewer jobs being created. The huge debt has also had repercussions on the job market. Between 2007 and 2009, employment fell by 8 million workers, causing the unemployment rate to rise from 4.7% to 10% (McConnell, 2012).