2nd great depression

Do you think there will be a 2nd great depression.
The economy hit a new low in America, and it seems no one seems to care. Gas prices are through the roof. The dollar is worth is going down. What is a country to do?

You havent heard the news today have you?

I doubt we will have a second great depression. The economy goes up and down, its normal.

And what news is that GoT?

Edit: Solink, I think you posted in the wrong thread.

Originally Posted by Eternal Paradox

I doubt we will have a second great depression. The economy goes up and down, its normal.

And what news is that GoT?

Edit: Solink, I think you posted in the wrong thread.

The governent has told us of their plans for how to deal with it.
(That's all I paid attention to)

Originally Posted by God of Twilight

The governent has told us of their plans for how to deal with it.
(That's all I paid attention to)

<_< Somehow, that inspires incredibly little confidence. Infact, given the track record of the government, it depresses me.

I'm not an economist so I don't know a great deal about these things, but recession is pretty normal. The economy expands, the economy contracts. And then it expands again. As things stand right now, the US's economy could be better, but isn't the horrible train-wreck that some make it out to be.

As for a second great depression? Considering the 1st was a result of rampant speculation and everyone borrowing immensely off of each other with total lack of awareness for the downsides, just the fact that we consider the possibility of a second one makes it less likely.

EDIT: Oh, and here's the magical elixir for the US's economy: getting out of Iraq. I don't really hold a stance on the issue as it is, but one can't deny its economic advantages.

Originally Posted by ashliezeldagirl

Do you think there will be a 2nd great depression.
The economy hit a new low in America, and it seems no one seems to care. Gas prices are through the roof. The dollar is worth is going down. What is a country to do?

your definition of low and mine are far different.

growth, WHICH IS WHAT THE ECONOMY IS CURRENTLY UNDERGOING is the antithesis of decay.

OMFG the rate of growth went down. Fact of the matter, REAL GPD increased faster than the population did. That's a good thing

for the last 20 years the politicians have told us we're in a recession. For the most part times are good. It's a power ploy.

and for the record I'm an econ major.

when there is a recession you'll know it by the mass layoffs, the general state of emergency and the air of discontent. When there is a depression you'll know it by the food lines.

that said we'll probably enter into a minor recession for a year or two as the market adjusts to the financing collapse. sadly the fed is still holding rates at artificial lows. I foresee inflation being the big issue in the next 5 years moreso than anything else. I'll likely be diversifying my savings a fair bit myself, I've already got around 15-20k in stocks but I'm trying to consider as to whether or not it's wise to leave them there. At this time I think stocks are greatly under values as an aggregate, but the nature of them is somewhat of a dissuadent.

As for gas prices. Here and today it costs less to buy a gallon of gasoline in america than it did in Europe 10 years ago, $6 a gallon is horrendous, apparently it's as high as $9 a gallon there now(gallon ~=4 LITERS; 1usd ~=.66euro). Amazingly, here and today the difference is even larger. Gas is cheep, I'd be willing to say that given it's finite nature it's undervalued and that people as a whole should be looking towards alternative fuel sources

Originally Posted by Igna

EDIT: Oh, and here's the magical elixir for the US's economy: getting out of Iraq. I don't really hold a stance on the issue as it is, but one can't deny its economic advantages.

the magical elixer is lowering taxes, slashing spending greatly, paying off debts, promoting free market capitalism(the conglomeracy and large trusts and psuedo-trusts the is not what one would define as absolutely efficient, and copyright laws are a bit dated hence the rise of predatory patents/lawsuits) and establishing true individual freedom at the social and economic level. localizing power would probably help as well, if resources need be pooled, a federal government could act as an intermediary, but in the current state where the gov acts as the absolute distributor... well...

Originally Posted by nighthawkx

your definition of low and mine are far different.

growth, WHICH IS WHAT THE ECONOMY IS CURRENTLY UNDERGOING is the antithesis of decay.

OMFG the rate of growth went down. Fact of the matter, REAL GPD increased faster than the population did. That's a good thing

for the last 20 years the politicians have told us we're in a recession. For the most part times are good. It's a power ploy.

and for the record I'm an econ major.

when there is a recession you'll know it by the mass layoffs, the general state of emergency and the air of discontent. When there is a depression you'll know it by the food lines.

that said we'll probably enter into a minor recession for a year or two as the market adjusts to the financing collapse. sadly the fed is still holding rates at artificial lows. I foresee inflation being the big issue in the next 5 years moreso than anything else. I'll likely be diversifying my savings a fair bit myself, I've already got around 15-20k in stocks but I'm trying to consider as to whether or not it's wise to leave them there. At this time I think stocks are greatly under values as an aggregate, but the nature of them is somewhat of a dissuadent.

As for gas prices. Here and today it costs less to buy a gallon of gasoline in america than it did in Europe 10 years ago, $6 a gallon is horrendous, apparently it's as high as $9 a gallon there now(gallon ~=4 LITERS; 1usd ~=.66euro). Amazingly, here and today the difference is even larger. Gas is cheep, I'd be willing to say that given it's finite nature it's undervalued and that people as a whole should be looking towards alternative fuel sources


the magical elixer is lowering taxes, slashing spending greatly, paying off debts, promoting free market capitalism(the conglomeracy and large trusts and psuedo-trusts the is not what one would define as absolutely efficient, and copyright laws are a bit dated hence the rise of predatory patents/lawsuits) and establishing true individual freedom at the social and economic level. localizing power would probably help as well, if resources need be pooled, a federal government could act as an intermediary, but in the current state where the gov acts as the absolute distributor... well...

Did you fail your economics class? You don't bloody lower taxes during a cluster-f'ck. Second, free-market capitalism has done nothing but -restrict- the lives of americans. Creating such a massive class-divide that we basically have an Aristocracy of the Rich. We need restricted capitalism, because trusting the corporations to care for the people is like trusting a wolf to care for the sheep.

Originally Posted by Nietzsche

Did you fail your economics class? You don't bloody lower taxes during a cluster-f'ck. Second, free-market capitalism has done nothing but -restrict- the lives of americans. Creating such a massive class-divide that we basically have an Aristocracy of the Rich. We need restricted capitalism, because trusting the corporations to care for the people is like trusting a wolf to care for the sheep.

no I received an A.
and if you're telling me that subsiding sloth at the cost fo the entrepreneuris the way to go, then there is something a bit off as it's a given that when something is subsidized there will be more of it. you can push your keynessian BS all you desire, it's a fact that planned economies experience great inefficiency. Taking a man and paying him to redistribute wealth where before he could have potentially been a producer inevitably means you have fewer producers.

according to your model the british system, where a man is payed more NOT to work than he is to work is a great thing. the same type of system which allows for an perpetuates corporate monopoly so long as the government and the political machine gets its share of the profits.

or do you forget that hoover denounced laissez-faire? or that a largely predominant for the world wide collapse of the late twenties was the government implemented tarrifs to fund all these social programs you say are so necessary?

Originally Posted by nighthawkx

no I received an A.
and if you're telling me that subsiding sloth at the cost fo the entrepreneuris the way to go, then there is something a bit off as it's a given that when something is subsidized there will be more of it. you can push your keynessian BS all you desire, it's a fact that planned economies experience great inefficiency. Taking a man and paying him to redistribute wealth where before he could have potentially been a producer inevitably means you have fewer producers.

according to your model the british system, where a man is payed more NOT to work than he is to work is a great thing. the same type of system which allows for an perpetuates corporate monopoly so long as the government and the political machine gets its share of the profits.

or do you forget that hoover denounced laissez-faire? or that a largely predominant for the world wide collapse of the late twenties was the government implemented tarrifs to fund all these social programs you say are so necessary?

What caused the economic collapse of the 20s was a number of things. Notably, the collapse of the German economy, the entente's squandering of money in grandiose navies, ect, ect, ect.

It should be noted that the Soviet Union was totally unaffected by the Collapse. Why? Planned economy. Now, I am not for a planned economy. The sheer number-crunching involved is...incomprehensible for any large state(it would be useful on a small scale). However, what I support is a mixture of the two. But that is irrelevant. Capitalism, total free-market capitalism, is a means to an end. A horrible one. Total free-market capitalism is the gateway to hyper-inflation. It gives too much power to the companies, and not enough to the people working for them.

Originally Posted by nighthawkx

no I received an A.
and if you're telling me that subsiding sloth at the cost fo the entrepreneuris the way to go, then there is something a bit off as it's a given that when something is subsidized there will be more of it. you can push your keynessian BS all you desire, it's a fact that planned economies experience great inefficiency. Taking a man and paying him to redistribute wealth where before he could have potentially been a producer inevitably means you have fewer producers.

according to your model the british system, where a man is payed more NOT to work than he is to work is a great thing. the same type of system which allows for an perpetuates corporate monopoly so long as the government and the political machine gets its share of the profits.

or do you forget that hoover denounced laissez-faire? or that a largely predominant for the world wide collapse of the late twenties was the government implemented tarrifs to fund all these social programs you say are so necessary?

I've got a question. If a major bank company like CitiGroup were to go bankrupt what would that do to the economy? Because that's exactly what happened to Bear Stearns. The only thing that prevented it's collapse, which would have resulted in a modern day run on the bank, was the Fed. They forced a sale and basically agreed to assume $30 billion in debt.

This has nothing to do with laissez-faire ecomonics or tax cuts. This is about subprime lending and ARMs. For the past 30 years banks have been grossly misrepresenting the terms of these mortgages and people who took out $50,000 loans 20 years ago are waking up to find out that their debt has inflated to $250,000. They can't eliminate their debt because they can't even afford to pay the interest on their principle. They get forclosed on, lose their property, and then the bank siezes these assets at a loss. Houses are being forclosed on at rates not seen since the Great Depression.

If major banks in America collapse, then all that so-called growth you've been bragging about gets flushed down the toilet. And believe me, Bear Stears isn't the only one.

In short, things are bad. Whether or not we're pushed into a depression as a result remains to be seen, but to underestimate the severity of this situation would be a dangerous, dangerous move.

We're in a period of Stagflation now if anything, I doubt we'll hit another great depression though.

Originally Posted by Eternal Paradox

I doubt we will have a second great depression. The economy goes up and down, its normal.

I agree. This is probably just a mild recession. Pres. Bush is putting into effect an economic stimulus plan to help raise the economy. Also, Franklin Delano Roosevelt reformed in his New Deal to prevent future depression. There's many safeguards for getting another Great Depression, but I'm not saying getting another Great Depression is impossible.

...Um, wow.


I honestly didn't think that we'd get swearing over economics.


Lay off it, now.

Originally Posted by Nietzsche

What caused the economic collapse of the 20s was a number of things. Notably, the collapse of the German economy, the entente's squandering of money in grandiose navies, ect, ect, ect.

It should be noted that the Soviet Union was totally unaffected by the Collapse. Why? Planned economy. Now, I am not for a planned economy. The sheer number-crunching involved is...incomprehensible for any large state(it would be useful on a small scale). However, what I support is a mixture of the two. But that is irrelevant. Capitalism, total free-market capitalism, is a means to an end. A horrible one. Total free-market capitalism is the gateway to hyper-inflation. It gives too much power to the companies, and not enough to the people working for them.

let me remind you that all those reasons you listed were in one way or another due to government action.

that said, virtually none of the factors which caused the great depression were present in Russia and there was long suppressed growth due to the serfdom which was imposed on people. Post WWII it was apparent that such growth could not be sustained in soviet Russia as it was more or less the effect of long delayed technological advancement and underutilization of natural resources caused by the czarist rule. Flash forward another 50 years past the great depression and you find a variety of economic maladies in the soviet bloc, poor quality control, a general lack of wealth. Heck the grapes of wrath was banned in Russia because it showed that even the poorest of Americans could afford an automobile whereas not even the elite could in Russia.

also explain to me how hyper-inflation as currently defined can exist when competing currencies are legalized? If our current form of tender was gold you'de have found that over the past 20 years that there was significant DEFLATION in the value of most goods and services. same goes for silver and a large number of non-renewable commodities.

Originally Posted by The Unsung Hero

I've got a question. If a major bank company like CitiGroup were to go bankrupt what would that do to the economy? Because that's exactly what happened to Bear Stearns. The only thing that prevented it's collapse, which would have resulted in a modern day run on the bank, was the Fed. They forced a sale and basically agreed to assume $30 billion in debt.

I'd say that in the long run it'd be great as it would serve as an example of inefficiency and poor management and others would avoid such actions.

This has nothing to do with laissez-faire ecomonics or tax cuts. This is about subprime lending and ARMs. For the past 30 years banks have been grossly misrepresenting the terms of these mortgages and people who took out $50,000 loans 20 years ago are waking up to find out that their debt has inflated to $250,000. They can't eliminate their debt because they can't even afford to pay the interest on their principle. They get forclosed on, lose their property, and then the bank siezes these assets at a loss. Houses are being forclosed on at rates not seen since the Great Depression.

conversely, as a percentage of houses bough, the number of foreclosures is not that bad and the bulk of buys bought standard loans.

I'll be honest though, I'm a bit biased, my father and mother cumulatively bought four houses in 2000 and they sold them in 2006. All I saw was tremendous wealth to be gained by the savvy at the cost of those who over-speculated.

on top of that, not that great a percentage of people actually are affected by such for closures. I cannot name 5 people who have had undergone a foreclosure

If major banks in America collapse, then all that so-called growth you've been bragging about gets flushed down the toilet. And believe me, Bear Stears isn't the only one.

In short, things are bad. Whether or not we're pushed into a depression as a result remains to be seen, but to underestimate the severity of this situation would be a dangerous, dangerous move.

it's inevitably the result of artificially low interest rates created through the devaluation of the dollar by the fed. While interest rates went up for ROW, the dropped to historic lows in the US. This is just the market adjusting. Some will feel pain, there is no doubt in that. The masses however will not suffer greatly and since the bulk were unaffected it really shouldn't matter nearly so much as you give it credit for. Be fare warned however, there is a LOT of latent inflation on the way. I'd expect around 40% or so over the next 10 years. Just a rough estimate however.


I just love how those claiming that the rich exploit the poor are the ones saying how the aggregate should bail out multinational corporations...