before searching for the SOLUTIONS.. it is essential to know what are the REASONS behind the RECESSION.

RECESSION referrs to the period of reduced economic activity. An economy is said to be in recesseion on the basis of few presumptions like under preforment for several quaters, slowdown in GDP, unemployment factoretc. Although recession is accoutable on these mere predictors but the reasons for a country in recession confinds in several preceding decades. Hence, recession is not a sudden saturation rather a cumulative phenomenon of past. Lets take look on what are the probable factors that amounts to recession in present terms:
Common Contributors:

• Gradual increase in the price of oil & foods in global market results in decrease in consumption. Hence transportation cost kept increasing over the years significantly & standard of living went lower & adversely affects in GDP.

Country Specific:

• In US for past several years availability of essy inflow of foreign funds led to a major economic boom in housing sector at cheaper rates. Accordingly all the loan agencies followed up & relaxed their lending terms in order to attract more & potential borrowers disregarding principal prudence of disbursment. Further, as the property value kept incrising, refinance & second mortgage became popular. However since 2006, the scenario had changed dramatically. Overbuilding of houses led to a surplus over the demand & results in downturn in home prices in many parts of US. Henceforth, refinace became more difficult. For such, many homeowners who had been facilitated, turned in to default due to drastic turnaround of the entire scenario.
• On the other hand, as long as sub prime lendings & refinance was an lucrative investment option, most of the major fund houses & American & European banks kept purchasing such loans from loan agencies as mortgage backed securities to diversify their portfolio. Afterward, once the housing market got over optimized & deflation starts all the home owners, borrowers, lenders & mostly major multinational banks felt the heat & hurdle of surveillance. An huge amount of loss became obvious among those giant financial players. Henceforth many investment corporations & companies & fund houses had found no other option than to file bankruptcy & rests are staggering in liquidity crunch . Accordingly as many other international financial backbones were severely suffered, an wave of panic started soaring up across the globe.
  

For an obvious obliviation of all of the above, US economy got stuck taking rest of the world in stagnant.

On the above article I have tried to present a simplified synopsis of the entire scenario. Lets have a look on my next article on how heavily the ongoing recession costs to the world at large.