Every few years, countries experience an economic decline commonly referred to as a recession. In recent years, the United States has faced the most devastating global economic challenges since the Great Depression. This period “a period of declining GDP, accompanied by falling real incomes and higher unemployment” has been referred to as the Great Recession (McConnell, 2012 pG-30). This paper will cover 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 outlook for the U.S. economy. Looking at the country's economic difficulties during this period (2007-2009), we conclude that the current macroeconomic situation is linked to unemployment, which is a direct consequence of the recession. It can be argued that the economic difficulties of the Great Recession began when interest rates were lowered by the Federal Reserve. This caused a bubble in the real estate market. Real estate prices fell, housing prices plummeted, and thousands of borrowers could no longer afford to repay their loans (Koba, 2011). The bubble forced banks to make home loans at unreasonably high risk rates. The banks' response caused a decline in the number of homes purchased and “a crisis involving mortgages and the financial securities built upon 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 across the United States (Scaliger, 2013). The debt burden eventually became unsustainable and the American crisis deepened, as its long-term effect on bank lending would affect not only the real estate market, but also the labor market. What initially seemed like an economic slump turned into a brutal crisis, and all eyes were on the government and the Federal Reserve to help the economy. Faced with the magnitude of debt the economy was facing, the Federal Reserve stepped in and bailed out the banks in an attempt to alleviate the economy's financial woes. The banks that survived took precautionary measures, making it difficult for businesses and consumers to borrow (Love, 2011). This therefore leads to the bankruptcy of businesses and the creation of fewer jobs. The scale of debt has also had harmful consequences on the labor market. Between 2007 and 2009, employment fell by 8 million workers, causing the unemployment rate to rise from 4.7 percent to 10 percent (McConnell, 2012).