Great Depression

Are We On The Way To A Third Depression? The 2010 Midterm Elections Are The Key! :(

Ronald Leave a comment

Nobel Prize Winning Economist Paul Krugman, a NY Times columnist, has stated recently that the United States is in danger of falling into a “Third Depression” that will last for many years! 🙁

This is not the first time the suggestion has been made, mostly out of fear, that the economic downturn that began in December, 2007, may slip further into a long range deterioration in employment, housing, corporate growth, state and local government services, and sustainability of the government “safety net”! 🙁

Krugman describes what he calls the “Long” Depression of 1873-1879, begun by the Panic of 1873 on Wall Street, but causing economic instability for two decades after the formal end of the event, lasting until the turn of the 20th century!

Of course, the later “Great” Depression of 1929-1939, which saw a revival from 1933-37, but then a further decline in 1937-38, was the worst economic times this nation has ever seen! 🙁

The problem in Krugman’s estimation is that MORE economic stimulus is needed, rather than less, and this debate about spending versus the deficit is raging in Washington, DC, and will determine the future of this economic downturn we are living through, which is called by many others besides Krugman, as the “Great Recession!” 🙁

IF the Republicans, with their lack of ideas on the economy other than more tax cuts for the rich, somehow regain control of both houses of Congress in the midterm elections, then it seems quite clear that we are doomed to a further decline and total social disintegration, as if conditions do not improve, the danger of a breakdown of law and order is a real threat! 🙁

As the author stated in an earlier entry, we cannot afford to let 2010 and after become 1937-38, when Franklin D. Roosevelt gave in to criticism of government spending, cut government programs, and triggered a new economic collapse only turned around by World War II!

So the midterm elections are the key to our economic future, and will determine much of the next decade of economic history for all Americans!

Are We Returning To The Years 1937-1938? :(

Ronald Leave a comment

When Franklin D. Roosevelt became President in 1933, he started to promote deficit spending to create jobs and provide aid to the millions of poor, unemployed and homeless!

Throughout the first term of the New Deal, FDR continued to promote economic stimulus, and although the Great Depression did not end, life was a lot better by 1936!

But under harsh criticism by conservatives and ideologues, in 1937, FDR cut federal spending and public works programs. This, unfortunately, led to a big drop in the economy, and the creation of the 1937-38 Recession within the Depression, making life much worse! This is looked upon as a tremendous mistake that prolonged the Great Depression! 🙁

In 2009, Barack Obama came in and promoted an Economic Stimulus bill to deal with the worst economic mess since the Great Depression! Aid to state and local governments, extension of unemployment compensation, and the inception of public works projects were all part of the mix!

The effects of this economic stimulus are just starting to “kick in”, and already we are hearing from many quarters that we must not continue to extend aid to states and localities and not continue unemployment compensation to the long term unemployed! Instead, we must cut spending and worry more about accounting figures, rather than those people within our midst who are victims of this Great Recession! 🙁

Therefore, the Senate has rejected extended economic stimulus, at least for the moment, but the Republican party is unlikely to allow any progress in this regard, and gaining 60 votes to overcome a filibuster is highly unlikely! 🙁

So hundreds of thousands of teachers, firefighters, police officers, and other public servants will be dismissed, and many people who have met the limits of unemployment compensation and are in danger of losing their homes as well, will be thrown to the wayside in the battle to cut spending and forget human suffering! 🙁

The result will be what the GOP wants: a downturn of the economy, a “double dip” recession, which they will then attempt to blame on the Obama Administration! 🙁

What a disgraceful state of affairs, not the way we should deal with the worst economic conditions in eight decades! 🙁 But more than ever, it looks like 2010 and 2011 and maybe 2012 will be a reprisal of 1937-1938! 🙁

Good News On The 80th Anniversary Of The Great Crash On Wall Street

Ronald Leave a comment

On this day, October 29, the 80th anniversary of the Great Crash on Wall Street that led to the Great Depression, we have good news: an increase of 3.5 percent in the Gross Domestic Product in the third quarter of this year, the first such increase in a year.

This officially marks the end of the worst recession since the Great Depression, and the growth rate for the quarter matches the normal rate of increase in the 80 years since the beginning of the Great Depression.

The problem is that much of the growth was probably due to the economic stimulus, so the question is whether the economy will continue to expand on its own in the coming months. Plus there is the issue of when will unemployment stop rising, and when will foreclosures start to recede.

So while happy at this development, it is obvious that we should not be overly optimistic at a permanent overcoming of the recession, because there is still danger that we could go right back into the recession in the future.

So we need to have our fingers crossed and hope for the best!