Are we close to a depression in the U.S.?

Question

Are we getting close to what happened during the Great Depression re our economy?

Answer 1

Whether or not we are going to have a depression is completly dependant on what the people in D.C. do next.

The problem all goes back to the Federal Reserve. By printing money the Fed causes interest rates to decrease. Interest is simply the "price" of money. So, the price of money has decreased, but the supply has not increased, nor has the demand decreased. However, businesses plan as though these things have happened. They transfer their investments into more long-run, higher order ventures. Then, when it is realized that no one is going to be spending money in the future, the "house of cards" collapses.

This is a very complicated issue that requires some amount of study. I suggest Boehm-Bawerk's three books, availible at mises.org. Also, Rothbard's history of the Great Depression, which can be found at the same place. Also, Roger Garrison's Time and Money.

If the government decides to take a hands off approach, the market will re-adjust, and we can get back to "normal." However, this will probably not happen. In short, at this point, we need to have a recession so that the market can readjust. The more that the government interferes, the longer this re-adjustment will take, and the bigger the recession will become.

Answer 2

The coming economic depression will make the Great Depression of '30 look like a day at the beach.

No one wants to admit it and no one's willing to accept responsibility, especially not the certain someone who spent trillions of our dollars on a certain war. Nor the same people who keep on printing money for nothing. Dollar bills are a promise that there is something bigger and more valuable behind that dollar; power. But the sad fact is the money is worthless, absolutely worthless. The only reason people still use it as legal tender is because they don't know otherwise. So as a result they will lie, cheat, steal and kill to get those printed dollars.

But say when the market crashes again and it costs $50 for a gallon of milk, who is going to get the better end of the bargain the man with hundreds of dollars? or the Man with the farm that produces the milk? The money eventually runs out, but not the milk.

Back in the first depression, people were dumping their barrels of milk because it was too expensive to sell, so they couldn't make a profit. But that didn't mean they had to starve. There was plenty to eat, just too many greedy people not willing to share.

This coming depression will devastate this country into a third world poverty ridden cesspool  of beggars begging for their masters (China) for help. But the rest of the world will be too busy enjoying our comeuppance.

Answer 3

if you look at the economic indicators

9.5 trillion dollars in debt

going deeper in debt 1.4 billlion more per day

oil is at $140 per barrell

look at the repercussions from those oil prices alone

Increased costs in

food

clothing

hardware

fuel

electricity

and the effect snowballs

as in

the farmer's cost to buy fertilizer is higher because it uses petroleum to produce, and the transportation to get it to him is higher

then his harvesting costs are higher because of high fuel costs

then transporting his crop around the country is higher becasue of fuel costs

then the grocery store's electricity bill is higher

all of these extra costs are handed down to the consumer

soon we will be seeing increased grocery costs over 33%

thats just groceries

everything else soon will be snowballing

want some advice?

grow a garden and learn how to can!

good luck

Answer 4

Depression???   We've not even experienced a Recession yet...

Recession = 2 Quarters of Negative GDP Growth

Depression = 10% Decline in GDP

Answer 5

No, we aren't. The great depression was much more severe than what you can expect to experience in the near future, and its causes were very different from the economic problems that are happening now.

You'll know it's a depression when shooting squirrels for food seems like a good idea.

Answer 6

Not even close.  We are not even in as much trouble as we were  in the late 70's  when we  had  inflation, gas lines and growing unemployment followed by a server recession in the early 80's. I think you have no idea  how bad the great depression was if you think things are that bad now. It was not just the US but the whole world and  one quarter of the workers were unemployed at a time when most families only had one wage earner. There was deflation not inflation and people lost their savings when banks failed.

Edit: from 1929 until 1933 the government took the hands off approach recommended in the above answer. Finally in 1933 when the unemployment rate reached 25% , the government began to take action but they made many mistakes which we have learned from and will not be repeated.