I’ve been hearing on the news and even saw a documentary comparing our current recession to the Great Depression. The documentary pointed out parallels between now and the depression. There were actually quite a few of them. However, I just can’t imagine a second Great Depression in our modern society. There is more government regulation. We have the FDIC so people don’t have to be afraid of losing their money in banks. We have unemployment and welfare. There are far more households where the man and woman work, and even if unemployment reaches 25% like during the depression, there’s only a 6.25% chance of both the man and woman being unemployed. On the other hand, there’s a 43.75% chance that at least one of them will be. Anyway, I just can’t imagine things getting quite as bad as they did back then short of some global disaster like World War III, and we’re going to assume nothing like that happens.
Only as long as there are sufficient people employed so they can be taxed to pay for it.
A few years back, “No one could have imagined them taking a plane, slamming it into the Pentagon — into the World Trade Center, using planes as a missile.” That didn’t stop it from happening.
Steven King imagined flying hijacked airliners into skyscrapers before Al Qaida did. It was in his novel Running Man.
I choose to be optomistic about the economy because it doesn’t benefit me to be pessimistic. It might not benefit me to be optomistic outside of feeling better, but I like to feel good.
Well they may have to reduce how much is paid, but they could pay a little at least such that people aren’t starving.
That’s the kind of thing you can’t imagine because it’s so extreme. It’s like imagining a nuclear war, even though it almost happened. Both were quite possible. I don’t think another great depression is a significant possibility, short of a major disaster causing it. But I’m no economist so I’m asking here. And chances are no one can give a definitive answer, which is why this isn’t in General Questions.
How bad can a recession get? ** As bad as the govt makes it.**
Tom Clancy did in his best selling novel Debt of Honor.
I say hope for the best, but at the same time brace yourself for the worst.
Condoleezza’s words are a better indicator of what many people wanted to believe than a description of literal truth.
I don’t see any safety nets in the economic system that’ll prevent us from entering a world of hurt if thats how things are inclined to go, but a lot of people want very badly not to believe that’s the case. Like BMax said, people like to feel good, and they’ll delude themselves in order to do so.
The Lone Gunmen:
Not a huge fan of the show, but it was a little weird watching this after 9/11.
“Truthers” reminds me of X-Files fandom slang. I think Chris Carter did it.
The Screaming Blue Messiahs, 1989:
Four Engines Burning Over the USA
We had better be able to solve this problem through large institutions - be they government or business - because our society is too structured towards private consumption and individual competition for us ever to really, meaningfully help each other again. We’d have to admit that we’re failures, nonproductive. We’d have to bitch and moan, and respond sympathetically to other people’s bitching and moaning. We’re not allowed to do either; bad character.
In the subdivisions and McMansion developments, there will be no informal barter economy or any of that neighbor-to-neighbor stuff you see in old movies. We don’t know each other, and we don’t trust each other enough to get to know each other. When the money runs out, the unemployed managerial class will just put the house up on a listing and disappear, somebody else’s problem.
Forces greater than us got us into this, and they’re going to have to get us out. We might make things easier on ourselves in the meantime, maybe even learn a little more abut what’s really important, but I don’t think it’s in our character.
It’s extremely unlikely that this will become a second depression. As the OP notes there are all sorts of institutions and policies which weren’t around 80 years ago. Probably a good comparison is the 81-82 recession which was the worst since the Depression. That lasted for around 18 months and this one will likely be longer. The peak unemployment rate then was almost 11%; I am not sure this time it will reach that level.
One big difference is the inflation rate which were in double digits by 1981. To a large extent the 81-82 recession was a deliberate one with interest rates being driven sky high by Paul Volcker as a way of fighting inflation. So monetary policy wasn’t being used to fight the recession, it was creating the recession. This time round inflation isn’t a problem and monetary policy has been used to provide a massive stimulus through various Fed facilities. My hunch is that all this stimulus along with the fiscal stimulus will show a significant impact by the end of this year and the economy will start growing again by then.
And how far into the current recession do most economists say we are?
Hard to get a consensus view on such a question. Most economists favor stimulus, but there’s disagreement on the size and nature of it. But from the figures provided by the new chair of Obama’s council of economic advisers, it’s predicted that the economy will begin to recover late this year with the stimulus. Without it, we’re looking at late 2010.
From what I’ve read, job recovery is expected to lag…i.e. employment figures won’t recover until sometime after that point…
Unemployment compensation runs out. Millions have exhausted theirs.
Actually the percentage of families with 2 income earners greatly increases the chance of foreclosure. Generally people have gone into bigger houses and fancier cars. They lived on dual incomes. So if either one loses their jobs ,they are in trouble. Often the woman does not make enough to keep them afloat.
The republicans are still fighting for measures that do not work. You do not hire employees if you get a tax break. You hire them if you have increased demand. Demand is increased if the lowly people can afford to buy. Not if more money gets funneled into the wealthy class.
While I agree that few two income families are sensible and live a life they could afford if either person lost their job (we have, but we seem to be highly unusual - we currently have no mortgage at all and could live off either of our incomes easily) it doesn’t make any sense that this would increase the risk of foreclosure. If you have a one income family and they loose their job, they are down to no income. If you have a two income family and one of them looses their job, they may still get foreclosed on - but I don’t see how it could INCREASE the risk.
If you buy a big home, then if either one loses their job ,you can not keep up. The chances of either one losing a job is double that both will. Then if either one gets sick, the same problem exists. They can not pay their mortgage or keep up with bills.
Your case is not typical and does note refute the problems across the country.
That’s likely true. However, even if they lose their house, they’re still going to have some income. They can get an apartment or something. They won’t be living in a Bushville (taken from Hooverville). Plus the government is forcing banks to work out better terms with financees. That’s something that wasn’t done in the early 1930’s.