Has the US economy already begun a collapse?

Question

I have a bad feeling we are about to enter a depression worse than the one of the early 30s. It feels like we are a house of cards that has already begun to collapse. The govt has bailed out Bear Stearns, Fannie Mae and Freddie Mac are rumored to be insolvent, the govt has sent rebate checks to most Americans. It seems like the things the govt has done are just trying to fight off a serious correction the market is about to hit us with. And really I dont think they can stop it. Theoretically, if the major financials fail, they govt can simply prop them up by printing tons of currency and paying their debts for them, but this will cause rampant inflation like Germany faced after WWI and would lead to buyers of US bonds being incredibly skeptical afterwards, which would lead to massive interest rate hikes in this country. We may have some problems coming home to roost. Anyone know economics well enough to argue the other side? Thanks for any input.

Answer 1

Maybe the US  economy will collapse,but we can handle it. We are Americans.

Answer 2

How does economic growth lead people to think that a depression is eminent?  I have a feeling things will be fine, and I doubt we will ever experience hyper inflation like Germany, it is unlikely our major financial institutions will fail, and the high gas prices could end up stimulating US industries.  All in all life isn't bad here, the economy will pick up soon and then we won't have to answer questions like this anymore =P just kidding, they are fun questions, but people weren't worrying two years ago when the economy was booming, and now it is nothing but "depressions ahead"  "the US is done forever"  "end of western civilization as we know it?"

Answer 3

The metrics of GDP and personal income would not support a Great Depression thesis.  Many large companies, McDonald's and Becton Dickson from medical diagnostic realized half their earnings internationally last quarter.  The people who hold financials in their portfolios are likely to experience severe pain.  But, a national depression?  No.  There will continue the steady trend of the lower half of the income earners living in th e U.S. having an appreciably lower relative standard of living.  It is a trend that has been relentless since circa 1970.   The education divide is becoming a pronounced income divide. It is not tied to politics.

Answer 4

something bad is happening that's for sure

it's low gdp growth isn't the big problem, because most of Europe's richest countries aren't growing a lot either the problem is the US dollar losing a lot of value fast.  That's making its nominal gdp (the main stat used to rank the world's biggest economies) grow a lot slower than Europe's countries and the rest of the world which doesn't use a currency that's growing fast, has high gdp growth.

So compared to the US it's almost like the rest of the world's economies are growing fast.

Answer 5

well technically, we aren't yet in a recession. the economy is still growing (ever so slightly).  We as Americans need to change the way we live soon, or it will change for us.  of course, just like everyone else, i have no interest in giving up all the little extras that we take for granted.  so... ya we could all be in for a ride.

Answer 6

Yes, we are. But does that mean that we need to panick? I should say not! What that means is instead about debating the issue you need to take care of home base and look out for your family. Pay off your debts and don't use any credit cards since that will save you from collectors. Don't be afraid you just need to take care of home base and live very frugally. We are in for some thing that is much worse than the 1930's.