Never say never, but an event like the Great Depression is highly unlikely. Even at the time it was a singular event, born of a particular set of circumstances and errors by policymakers that would be difficult, though again not impossible but highly unlikely, to repeat. Consequently, and given the frivolous nature of Option G, I was unable to vote.
To start, the highest unemployment rate during the Great Depression was 24.9%. This at a time when what is today called the welfare state was, in the United States, extremely rudimentary and therefore provided no counter-cyclical stimulus. Throw in that the response of the Federal Reserve at the time was to raise, not lower, interest rates in order to protect the value of the dollar.
This last was the conventional economic wisdom of the era to that time. It worked, the dollar stayed relatively stable - but at the cost of economic collapse and record high unemployment. This setting the stage for Keynesian economics in the form of the New Deal, which to be sure mitigated, but did not cure, the Great Depression. (It would take World War II to do that.)
Since the Great Depression, the highest unemployment rates the nation has experienced were 10.8% in 1982 in response to the galloping inflation of the 1978-1981 period. 10.1% as a result of the so-called "Great Recession" of 2007-2009. Then finally, 14.8% in the wake of the pandemic. (This last being a deliberate policy choice, unlike the first two which were the result of the business cycle and various mistakes by policymakers.)
Please note, the latter three were not good, but they were nothing like the wholesale collapse and epidemic poverty. This because, whatever its faults, the welfare state mitigated the effects of economic contraction and sustained a certain level of economic demand that kept the economy from total collapse.
Further, as noted above, the response of the Federal Reserve in 1929-1930 to the stock market crash was to raise interest rates. This was the conventional economic wisdom of the era and it made matters far worse than they need have been. Since then, the response to recessions has been a lowering of interest rates and thus what might have been economic collapse has resulted in, at worst, sharp but not catastrophic, contractions.
To be sure, Keynesian economics had its own flaws. Thus the aforementioned "Great Inflation" of 1978 to 1981. If the inflation now is considered painful, it might be well to recall that in 1979 inflation hit 14.5% - the highest ever recorded in peacetime - and 13.1% - the first time the nation experienced back to back years of double digit inflation in peacetime. By contrast, the current inflation - again not good - is relatively tame.
Put it all together and a "Great Depression" seems unlikely. Again, that does not rule out deep recessions - see 1982 when to combat inflation the Fed punched up interest rates to 21.5% - but the infrastructure is there to cushion economic contractions. Thus making a Great Depression (or its comparable "Forgotten Depression" of 1919) highly unlikely.
To be sure, policymakers can make errors. However, the interesting thing this time is that the errors are more likely to be caused by too lax a hand, not to tight a grip. Thus the current inflation was caused by overstimulus spending by Washington and a Federal Reserve that waited too long to raise interest rates. Thus the bias is toward higher inflation and not deeper economic contractions.
Again, never say never. Human beings are imperfect and imperfectible and the unforeseen can change the calculus. That said, in many respects the chest pounding over the "next Great Depression" is a case of fighting the last war. If anything, the problems of the moment are NOT a depression, but a return to the galloping inflation of the late 1970s.
Best then to recall the words of Kipling. "If you can keep your head about you, when all around you are losing theirs', then you will be a man my son."
Depressions historically last less than 10 years... I don't know where you got the 50 year figure from. With all the checks and balances now in place on global markets, it's unlikely that a depression will happen... a recession is likely before 2023 that may last a year or two.
s I don't know since I don't live in the US. I'm sure things are not as bad as they're in the shihole where I live.
So it might not happen soon.
Soon very soon. We are heading down hill with you too.
Opinion
19Opinion
don't know. been hearing about problems forever, doubt anyone can predict this.
for GDP to fall when the govt controls the numbers, would require the govt to want it to fall or quite an event to occur. We could stop producing everything for 2 years, leave it parked out off the piers... and still have rising gdp... as the govt just fills in the numbers with printed money and prices go up.
A major disruption like terrorist attack or conflict over taiwan might do it.
We are in hard times now with inflation out of control and rising rates, that could expose a lot of "junk" businesses, mess up real estate market, job losses. It's possible we are close... it's all govt policy and good fortune at this point.
We may have the collapse of everything. So enjoy your day and hope as good... tomorrow. If that's true, plan on social chaos and real stuff to have value.
What will I do... I'm going to be planting a garden no matter what and some fruit trees. We still live our lives... not going to live in fear.
Should have happened decades ago.
The US has been living beyond it's purpose since the Soviet Union was dissolved. Every day since has been a gift. But in True American fashion. you've just been acting entitled, getting into fights with your betters, and pissing it all against a wall.
Probably 2023 with the way things have been going thanks to the dumbass in chief and his feminazi sidekick. Then either Trump or Desantis or someone will come in in 2024 and things will begin to heal.
We’re in it but it’s going to a be a small one Republican are more friendly to business and the dems approval numbers are in the toilet, Joe has a 33% approval rating making him officially the worst president in America history since polls began
thank god i bought those guns. shits gonna get primal
Depends upon what you mean? A stagflationary decline, like the 1970s? We are there now!
A deflationary depression like the 1930s? No. See what nightdrot said.
It is here and now and only going to get worse thanks to THE DEMOCRATIC COMMUNIST PARTY OF AMERICA. Dictator BIDEN and Giggles HARRIS in charge
I'd be fucked because I'm disabled to the point where I'm in need of assistance.
We're already far worse off than we were in the great depression and it's only getting worse
I do not think we will have a depression but it is not going to be nice 3 years. And yes it will take some time after that to recover.
The next great depression will happen when the federal government cannot afford to pay the annual debt service.
How many fortune tellers have been right? Let’s see…. 0%.
off topic... how cute the uncles look.
Not sure it will happen again. Aside from that point, it would be next to impossible to predict.
Probably after the virus. I mean Spanish flu then followed by the depression.
Soon most likely with Democrats
maybe 2023
Lmao
Sooner than we think
Any day, now!
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