Wait... Isn't it impossible to fall into another Great Depression?

[quackerww]

Wait... Isn't it impossible to fall into another Great Depression?

Explain for or against.

 

[JS80]

Against. It's very possible to fall into another Great Depression.

 

[StageLeft]

Yes, it's possible, especially if my doctor won't refill my prozac prescription.

 

[ProfJohn]

Highly unlikely.

Our economy is SO much bigger today.
It is far more diversified.
We've learned a LOT about managing an economy since the 1920-30s.

Keep in mind that one of the reasons the great depression was so great was because the government did nearly everything wrong.
The shrunk the money supply by a massive amount.
The passed tariffs that decreased imports and then added to a world wide economic slow down.

 

[SagaLore]

It won't be a Great Depression until most of us can't afford to be posting on Anandtech.

I just don't see that happening. Not to that extent. I do think we're headed for a Great Recession though which will help reset the economy.

 

[dmcowen674]

Originally posted by: ProfJohn
Highly unlikely.

Our economy is SO much bigger today.

It is far more diversified.

We've learned a LOT about managing an economy since the 1920-30s.

Keep in mind that one of the reasons the great depression was so great was because the government did nearly everything wrong.

The shrunk the money supply by a massive amount.
The passed tariffs that decreased imports and then added to a world wide economic slow down.

Quoted for future reference as we watch the "Too big to fail" giants do just that, fail.

What have we learned?

18 million dollar salaries to sink a company not enough for CEOs?

 

[alchemize]

It would either be a Greater or a Lesser, can't be another Great.

 

[brencat]

Great Depression probably not.

A very serious recession with 8% - 8.5% peak unemployment that lasts 2-3 years, very likely IMO.

 

[Blackjack200]

Originally posted by: ProfJohn
Highly unlikely.

Our economy is SO much bigger today.
It is far more diversified.
We've learned a LOT about managing an economy since the 1920-30s.

Keep in mind that one of the reasons the great depression was so great was because the government did nearly everything wrong.
The shrunk the money supply by a massive amount.
The passed tariffs that decreased imports and then added to a world wide economic slow down.

Japan knows a thing about finance, they have a diverse economy, and they've been doing pretty shitty for 20 years now. Certainly not as bad as the great depression, but I don't think we should be too arrogant here. Our credit markets are a disaster, and that represents a very real threat to the economy.

 

[Vic]

"Those who fail to learn from history are doomed to repeat it."

The reason we could fall into another Great Depression is exactly because we assume that would be impossible. At the same time, there is practically no one left alive today that was an adult in the Great Depression.
A similar fate awaits us with total global war. As soon as most everyone who can really remember WWII is dead, we'll do it again.

It is the ability to teach our children what we have learned that separates us from the animals. Unlike the beasts, we can pass down knowledge from generation to generation to generation, ever building upon itself. Something that they simply cannot do in any fashion, thus every generation to them is like the first for their species.

It's when we stop doing that, when our parents stop teaching and our children stop learning, that the shit hits the fan. Every time.

 

[newmachineoverlord]

Originally posted by: alchemize
It would either be a Greater or a Lesser, can't be another Great.

QFT

 

[WhipperSnapper]

I can definitely see us falling into a "Greater Depression" as a result of the credit crisis, our nation's third world rate of population explosion, the world's growing Malthusian problem (increasing world population and more nation's developing their economies = higher prices for resources), and the economic force of Global Labor Arbitrage.

It may not happen overnight and it might not be obvious, but slowly, the nation is transforming into a third world economy and the middle class is in peril. Eventually we will have a "Greater Depression" but it won't stand out because by then the people will probably be conditioned to it.

 

[bamacre]

Originally posted by: Vic
"Those who fail to learn from history are doomed to repeat it."

The reason we could fall into another Great Depression is exactly because we assume that would be impossible. At the same time, there is practically no one left alive today that was an adult in the Great Depression.
A similar fate awaits us with total global war. As soon as most everyone who can really remember WWII is dead, we'll do it again.

It is the ability to teach our children what we have learned that separates us from the animals. Unlike the beasts, we can pass down knowledge from generation to generation to generation, ever building upon itself. Something that they simply cannot do in any fashion, thus every generation to them is like the first for their species.

It's when we stop doing that, when our parents stop teaching and our children stop learning, that the shit hits the fan. Every time.

:thumbsup:

 

[TheSlamma]

It's not at all impossible.. it's just not going to happen as fast or as easy as Dave wants it to.

 

[Juddog]

I think that this is pretty relevant to the discussion, especially where she goes over the fears of another great depression.

 

[retrospooty]

Originally posted by: brencat
Great Depression probably not.

A very serious recession with 8% - 8.5% peak unemployment that lasts 2-3 years, very likely IMO.

Agreed. A bad recession is very possible.

 

[BeauJangles]

Originally posted by: WhipperSnapper

It may not happen overnight and it might not be obvious, but slowly, the nation is transforming into a third world economy and the middle class is in peril. Eventually we will have a "Greater Depression" but it won't stand out because by then the people will probably be conditioned to it.

When did it become so popular to declare America is / will be a "third world country / economy?" Seriously, I doubt most of the idiots saying things like that have any idea what they're talking ab out.

 

[WhipperSnapper]

Originally posted by: BeauJangles

Originally posted by: WhipperSnapper

It may not happen overnight and it might not be obvious, but slowly, the nation is transforming into a third world economy and the middle class is in peril. Eventually we will have a "Greater Depression" but it won't stand out because by then the people will probably be conditioned to it.

When did it become so popular to declare America is / will be a "third world country / economy?" Seriously, I doubt most of the idiots saying things like that have any idea what they're talking ab out.

I guess that depends on your definition of "third world". Imagine what it would be like if the American middle class had the lifestyle of America's poor today. That's what I had in mind. The U.S. might be on the upper end of what it is to be a third world country, but the absence of a middle class would make the U.S. a third world nation IMHO.

 

[alchemize]

Originally posted by: WhipperSnapper

Originally posted by: BeauJangles

Originally posted by: WhipperSnapper

It may not happen overnight and it might not be obvious, but slowly, the nation is transforming into a third world economy and the middle class is in peril. Eventually we will have a "Greater Depression" but it won't stand out because by then the people will probably be conditioned to it.

When did it become so popular to declare America is / will be a "third world country / economy?" Seriously, I doubt most of the idiots saying things like that have any idea what they're talking ab out.

I guess that depends on your definition of "third world". Imagine what it would be like if the American middle class had the lifestyle of America's poor today. That's what I had in mind. The U.S. might be on the upper end of what it is to be a third world country, but the absence of a middle class would make the U.S. a third world nation IMHO.

You mean if the middle class all were fat, had pretty much as much smokes and booze as they wanted (along with drugs for those who chose), all had televisions, cell phones, most had cars, the prior generation of X-Box or Playstation (OMG USED?). Free or subsidized housing (not 2000+SF), free access to quality healthcare (just have to wait a long time in an ER), and a nice check every month to pay for the little things you need. Access to protected wildlife areas, zoos, museums, community centers, parks and sporting complexes. Yah, I can see your point :roll:

 

[blackangst1]

Originally posted by: Vic
"Those who fail to learn from history are doomed to repeat it."

The reason we could fall into another Great Depression is exactly because we assume that would be impossible. At the same time, there is practically no one left alive today that was an adult in the Great Depression.
A similar fate awaits us with total global war. As soon as most everyone who can really remember WWII is dead, we'll do it again.

It is the ability to teach our children what we have learned that separates us from the animals. Unlike the beasts, we can pass down knowledge from generation to generation to generation, ever building upon itself. Something that they simply cannot do in any fashion, thus every generation to them is like the first for their species.

It's when we stop doing that, when our parents stop teaching and our children stop learning, that the shit hits the fan. Every time.

I agree, but I havent heard anyone say its impossible.

 

[SickBeast]

Anything is possible if you try.

I suggest America try not to have a recession so that it doesn't cascade up to my beloved Canada.

Please lobby your politicians to regulate your financial system properly and responsibly.

 

[WhipperSnapper]

Originally posted by: SickBeastI suggest America try not to have a recession so that it doesn't cascade up to my beloved Canada.

One day...Americans will be to Canada as Mexicans are to America. Prepare to be invaded by American illegal immigrants, hosers!

 

[Atreus21]

Originally posted by: quackerww
Wait... Isn't it impossible to fall into another Great Depression?

Explain for or against.

I was in a macroecon class a few years ago. One of the most informative graphs she showed us was a line graph, showing the GDP since 1900.

From 1900 to about 1948, there was enormous fluctuation in the GDP. Big gains, big losses, big gain, Great Depression big loss, WWII big gain, and so on.

Then the graph calmed down. Small gains, small losses. This, we were told, was the point at which we started exerting some controls on the economy. Government intervention cost us growth, but also dampened recessions.

Barring something unbelievable, I believe nothing like the Great Depression will ever happen again.

 

[SP33Demon]

Originally posted by: retrospooty

Originally posted by: brencat
Great Depression probably not.

A very serious recession with 8% - 8.5% peak unemployment that lasts 2-3 years, very likely IMO.

Agreed. A bad recession is very possible.

Reasonable post, and it will probably happen. But all this doom and gloom is ridiculous. So what if we have to eat a 3% rise in unemployment? So what if you can't buy your kids a shiny new Playstation 4 for $900 this year and have to get them GI-Joe figurines instead? Cry me a river, most of us would still enjoy the highest standard of living on earth. God forbid, your Starbucks closes down or your bank is bought out by one who didn't make risky loans (Like Citi, Chase, Wells, HSBC, BoA, so on and so forth).

 

[Dufusyte]

Originally posted by: Atreus21
From 1900 to about 1948, there was enormous fluctuation in the GDP. Big gains, big losses, big gain, Great Depression big loss, WWII big gain, and so on.

Then the graph calmed down. Small gains, small losses. This, we were told, was the point at which we started exerting some controls on the economy.

Forest fires are a necessary part of a healthy ecology.

Winter is also a good thing.

The tides rise and fall. It is said that if there were no tides, the ocean would be stagnant and die.

Economies need a boom and bust cycle to stay vibrant, like a heart which contracts and expands.

Forest fires clear out the brush and enrich the soil; winter kills mold and insects; tides circulate oxygen through the waters; economic busts bankrupt mal-investments.

Without a bust, the mal-investment continues, the crazy derivatives continue, the absurd mortgages continue, the idiocy goes unchecked.

The longer the government intervenes to prevent a bust, the greater the financial idiocy mounts.

And the higher they are, the harder they fall.

Soon the teacher will be able to update the graph to show the very long calm was followed by a very big fall.