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I know its been asked a thousand times. But things change fast so my updated question is do you think that we are going to have another great depression? To have asked that question 6 months ago might have elicited a different response.
In what time frame? Seriously, your question implies that you're asking if the US will ever have a depression ever
Let's start with a look at the "great depression" of the thirties to really get a handle on the realities of economic downturns and just what is implied for the majority when these downturns arrive. We were taught in school that the greater majority of American's were impoverished by the banking crash of the twenties, but the truth is that the majority of America was already poor. We were taught that government assistance programs "lifted" people out of poverty when the truth is that the war created a booming economy, and that really turned things around relative to the spread of wealth.
The rise of labor (1950's) demands on business pushed that prosperity further and created the so called middle class, at this juncture American economists decided that this rise would be the measure of all future economic determiners of America's well being, and now we are at another juncture (2008) that signals a different view of what constitutes our collective well being.
This new view includes the reality of a large portion of our available labor force being idled, permanently. THIS, not a depression will be the subject of many debates on what we as American's will tolerate as an acceptable percentile of our available workforce living in poverty. The old saw that a depression is you being out of work while a recession is your neighbor being out of work will be the new norm, the US has become that kind of society.
I know its been asked a thousand times. But things change fast so my updated question is do you think that we are going to have another great depression? To have asked that question 6 months ago might have elicited a different response.
Yes, at some point, it's inevitable. Humanity hasn't learned to temper the base emotions of fear and greed. Therefore, there will be depressions until we become a more emotionally intelligent species.
... the truth is that the majority of America was already poor. We were taught that government assistance programs "lifted" people out of poverty when the truth is that the war created a booming economy, and that really turned things around relative to the spread of wealth.
From the American point of view, WWII was the greatest "social program" in history. It put Americans to work, it created demand (war materiel to be built), it gave the nation a sense of purpose, it reallocated labor (young men drafted) and thereby freed up jobs for new labor (for instance, women who formerly did not work outside of the home), it created a sink for surplus factory capacity, and ultimately it destroyed foreign competition. Roosevelt's programs of the 1930s may have helped only slightly, or they may have helped substantially - the answer depends on our political orientation. But regardless, they paled in comparison to the "help" of WWII.
There will likely never be another such economic stimulus program again; at least, not one that the world could afford.
I get a kick out of how talented us humans truly are at digging our heads deep in the sand.
Someone stated that yes but possibly centuries away. I find that interesting. We are currently facing a global economic meltdown. Our fiat currency's status as the world's reserve currency looking to go away. Our multitrillion dollar national debt. Our baby boom entitlement group looking to come on the scene. Our service, debt based economy that is all built up by the "strength" of the dollar. Our housing "bubble". Our student loan "bubble". Obama Care.
There is no way that this is going to continue like it has for much longer at all. Who knows how long. Everything could fold in on itself tomorrow, but I'm in agreement that clearly it's only a matter of time.
Not only do we see things secularly unfolding. The Bible even talks about how Babylon is going to fall. America clearly with all the evil and ungodly behavior we not only embrace but export to the world is a type if not the Babylon it talks about in the Scriptures. So there is even divine insight on this. It is certain.
No two depressions are the same. It depends on what you mean by depression.
America is going to be an economy of two extremes, highly successful companies and employees and average professions and people working for stagnant wages.
That extremes will be geographical too. Cities like seattle and San Fran will be ever more vibrant, while large parts of America will depopulate and stagnate.
Within a city, there will be two extremes. Urban areas will be either very nice or not nice. Suburbs will be very affluent and poor. The urbanization of America is not going to be as radical as suburbanization. Some poor people are moving into suburbs. Some affluent suburbanites are moving into urban areas. But both cities and suburbs will be divided along class lines.
Overall, America will be a much weaker nation, much more hardened with the need for welfare and the lack of funds, and much more friction between the have and the have not.
From the American point of view, WWII was the greatest "social program" in history. It put Americans to work, it created demand (war materiel to be built), it gave the nation a sense of purpose, it reallocated labor (young men drafted) and thereby freed up jobs for new labor (for instance, women who formerly did not work outside of the home), it created a sink for surplus factory capacity, and ultimately it destroyed foreign competition. Roosevelt's programs of the 1930s may have helped only slightly, or they may have helped substantially - the answer depends on our political orientation. But regardless, they paled in comparison to the "help" of WWII.
There will likely never be another such economic stimulus program again; at least, not one that the world could afford.
Awesome. I have been saying this for years. WWII gave America an inflated national capacity. It resulted in an inflated view of itself and its people. Things like the free enterprise system, free market, social programs, free health care, the American dream are inflated and overestimated ideas. Their effects are not theirs but the effects of WWII, namely the building of American national capacity and the destruction of foreign competition.
Whether the USA will be under capitalism or socialism, it will not get to the relative level of prosperity and global standing. If we are under the republican brand of capitalism, we will be a mediocre capitalist nation. If we are under the democratic brand of capitalism, we will be a mediocre capitalist nation. If someday we are under whomever a brand of socialism, we will be a mediocre socialist nation.
The dream of us becoming scandinavia the way they are today just go to show how hilariously ignorant, historically ignorant, and terrifyingly simplistic many Americans are. It is the prime evidence of a people deprived of meaningful sorts of critical thinking, despite their IVY degrees from institutions that also grew an inflated sense of self worth.
The dream of us becoming a free market society and becoming prosperous overall is deeply dishonest and completely misleading.
The real valuable but bad sounding truth is that we are just not going to be what we used to be.
Not only do we see things secularly unfolding. The Bible even talks about how Babylon is going to fall. America clearly with all the evil and ungodly behavior we not only embrace but export to the world is a type if not the Babylon it talks about in the Scriptures. So there is even divine insight on this. It is certain.
what are we putting our faith in?
This is the Economics Forum, not the Religion Forum. Therefore the portion of your post which I quoted is off-topic here. The ancient writings of a particular people are simply not relevant to any discussion which can conceivably occur in the Economics Forum.
No, it will not occur for the simple fact that we have a stronger and more responsive central banking system, a number of automatic economic stabilizers, as well as an increased favor-ability for discretionary spending during bust cycles. The confluence of these things makes the possibility of an agonizing and maleficent depression such as the one of the 1930s incredibly unlikely.
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