decrease in lending and borrowing, or a freezing up of available credit. When credit dries up, the economy is on its

knees. The crisis was not limited to the United States. Iceland, Ireland, the United Kingdom, Spain, Portugal, and

Greece all had similar housing boom and bust cycles, and similar credit freezes.

If businesses cannot access financial capital, they cannot make physical capital investments. Those investments

ultimately lead to job creation. When credit dried up, businesses invested less, and they ultimately laid off millions
of workers. This caused incomes to drop, which caused demand to drop. In turn businesses sold less, so they laid
off more workers. Compounding these events, as economic conditions worsened, financial institutions were even

less likely to make loans.

To make matters even worse, as businesses sold less, their expected future profit decreased, and this led to a drop
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