Economic Depression?

I don't think we're heading towards another Great Depression, but I may just be optimistic. I don't really know what an economic depression is like. I can't accurately judge how close or far our current state is to a depression.

But here in Tennessee, the situation's bad, too. It's almost impossible to get a job, and it's been that way for months. Everyone I know who does have a job doesn't get any hours. Even now, during the holiday season, they don't get many hours, though they're still getting more than they were a month ago.

Gas prices have gone down a lot lately, but it's not enough because food prices have gone up.

Speaking personally, it seems like it's pointless to even look for a job because the chances of getting one are slim, and driving around looking for a job would only drain the gas tank. It's a horrible Catch-22: Either don't look for a job and earn no money or pay money you don't have for gas so you can search for a job and probably not find one. Of course, even if you do get a job, how are you supposed to pay for gas to get back and forth, when you won't get your first check for a week, two weeks, or even a month?

the employment percentage of Northern Texas is pretty good, still increasing.

i don't think we'll go into another 'great depression', saying this i think it'll all come to pass
[size=10]more later than sooner.[/h]
i based this on no supportive facts xD
[size=10]the sooner we can repay our debt/end the war the faster we can progress. about the food thing idk. [/h]

I think we're heading towards a Depression, though it's a different thing for the government to actually admit that. I don't think it will be as big as the previous one, but I do believe it will effect how people view things from now on. In Florida, jobs are crap and they are so hard to find. I mean, the friggin shelters here have been turning people away for months. Whole famlies. It's really sad, and almost 80% of the houses for sale in my town are foreclosures. Things really got fucked up. It's going to take years to repair it and honestly I don't think there is anything they can do that will be a quick fix.

From the things I have read economists believe that if we are heading for a depression and that it will be worse than the great depression. due to factors like

1. Our money wasn't nearly as worthless as it is now
2. Our economic backbone was in a different sector

the list goes on but, the point is the situation is a bit worse. Coupled with the fact the people nowadays don't really know how to do anything on their own. Our grandparents (and some of our parents) were flexible. Your dad knew how to fix just about anything. Your mother knew various things to help the family,etc. Nowadays, how many of us can even change out oil properly? I have seen people so inept that they can't even change a simple flat tire. We're more of a spoiled generation so things will be harder for us in the long run.

Now, the doomsayers (those who believe that a depression is only the beginning) are coming out and saying there is a high possibility that America will fracture (California-Utah, The east coat, the south,etc). Though I highly doubt it would occur but, the possibility can occur. The south tried to split once before so what's to say they wouldn't try again if the U.S. became crippled due to the fiscal crisis (people losing their jobs, homes, can't afford basic necessities, a growing dissent that the Federal government can't do the job anymore). Nothing is impossible.

I would like to remain optimistic and think that the world economy will not go into a depression. Maybe I just plain scared of the consequences if such a scenario were to occur. However, the possibility of a depression occuring remains very real.

Some economists have defined depression to be a more severe form of recession, with widespread unemployment, severe drop in a country's GDP, as well as other factors. Therefore it is difficult to determine whether a country is in a state of depression by one's view of things. Statistics and figures may be required, though they aren't always reliable.

A depression? Maybe to probably. Like the Great Depression? Never. Reason for my argument is that we don't have dust storms tearing up the midwest like it did in the Great Depression, nor did our assets and money disappear like *snaps finger* that as it did during the crash of the stock market. We might decline into a financial situation similar to the Great Depression, but it's a slow and gradual process that hasn't made the nation collapse like it did then. (Well, almost did. Then FDR and WWII came and saved the day.) As long as the basic services are being worked on and the food supply does not go feed the dustdevils, I don't think we would ever reach a state like the Great Depression.

It's also my opinion that this another way for nature to regulate the environmental equilibrium. Overpopulation has definitely contributed more than it's fair share to our current economic, financial, energy, and resources problems. As people say, it's a dog eat dog world, and that still applies today, and I think that no matter what the governments do, there are people who are going to get the short end of the stick, and possibly die off. One of the major things that's keeping Thomas Malthus' theory on overpopulation from being completely true is the human ingenuity - technology. With technology, we've found shortcuts, advancements, and discoveries. So for now, I believe that we can prevent the world from slipping something into a "Great Depression," but I wouldn't be surprised if the recession lasted for a decade or more.

I agree with the overall idea I think there is a "minor detail" that needs to be looked at.

People don't have money to buy cars. It's not that we don't want cars, we just don't have the extra money to buy one. Look at the car dealerships (I know you're across the pond and the info might not be easily accessible). A majority of the countries 21,000 dealerships haven't had a profitable year since 06 (according to the Atlanta Journal Constitution). As of June 08 auto sales were down 18.8% (according to the USA today). People don't have the money or the desire to buy cars (let alone "green" ones). Which is part of the reason I think the U.S. automaker bailout is utter rubbish but, that's another subject for another time.

Atlanta Journal Constitution

USA today

Energy issues aside, where are we going to get the money to transform industries primarily based on gas-chugging vehicles? And the money to implement said technology? Idealisitc, but unrealisitic given our current situation. On top of that, like FPOD mentioned, people don't have the money to buy things like that. People with Hybrids don't get the advantages of driving them until a couple to 5 years later, then they start saving on the money.

No, no I agree that the governments should implement public works to get people back into some form of employment, much like FDR's new deal programs. I also think it's feasible for the government to deal with the energy crisis by creating more green-industry jobs. Unfortunately, I also think that this field is more R&D than manual labor, and it will take a lot of money to implement anything related to energy-reducing protocols and practices. For the most part, we would need something technologically and pragmatically possible to implement before suggesting a face lift for the green industry.

Some economists believe the new deal actually made the effects of the great depression linger more than it would have if the government had stayed out and let the market. Though I agree with scribe that a massive industry output would be the best cure for the ails of the world economy (similar how WW2 pulled the U.S. out of the depression). Though I'm not exactly behind government expansion to cover infrastructure (i.e. expanding government to solve the economic crisis).

I agree with G-money though there is a lot of work to be done before giving the green energy sector a face lift (efficiency is one of them).
As a lot of problem are still plaguing the green sector. Distribution of resources (Natural Gas, Hydrogen). When it comes to electricity such as solar and wind the problem lies in distribution as well. Our energy grid is very inefficient while groups are trying to block reorganizing the grid. Another problem with solar power is the fact it only catch 10% of the spectrum. It takes years for a solar array to be come profitable. companies aren't exactly jumping at those kinds of investments.

To be fair to FDR, we tried the conservative approach to economics which

1) Blew up in our faces, similar to the way the deregulated mortgage market did. In this case, it was buying stock on margin that was unregulated. This didn't cause the depression, but helped make the market effects more devastating.

2) Didn't do anything to fix it. Remember, FDR didn't get into office for another 2 and a half years after things started. Hoover adhered to the laissez-fair principles and watching things get worse from 1929-1932. Even most conservative economists think that his approach was probably not the correct one.

Most economists think FDR's stimulus type projects did help(more on this below). Many of those who criticize him think he should have intervened more strongly and directly. Conservatives, though, do probably have some point in claiming that some of his pro-worker legislation hurt the economy on a large scale.

A couple points I think we need to keep in mind concerning this recession:

1) What's the point of a stimulus package(say, giving everyone $500)?

The basic idea is to smooth out consumption. If a lot of people lose their jobs, they can't afford to buy as much stuff. In a short recession, a stimulus can help put a little extra money in the hands of consumers allows them to maintain a higher level of consumption and thus keeps industries from being hit as hard. In a longer recession, the effect is the same, but less likely to succeed on a large scale. It may simply make the recession slightly less worse, or simply represent a failed attempt by the government to keep the recession under control at its outset. Further stimulus packages are also motivated by the desire to keep people from losing their houses.

2) Why did we bail out the banks?

We pretty much had no choice. There's a whole thread on this somewhere.

3) Why should we bail out the Big Three?

Normally, the government shouldn't and wouldn't. These companies have been pursuing an ineffective business model for at least 20 years. The only reason they will likely get help is that this recession already looks bad, and killing the Big Three would destroy a lot of jobs, making the recession even worse. Basically, many economists, including those at the FRB think that the cost of not bailing out the Big Three is too high at this moment. However, the government should try and squeeze everything possible out of both the Big Three and the UAW win terms of reform with this bailout.

In the short run you are correct but, how is a one time shot of $500 supposed to help the individual? What is that...the power bill and maybe cable? If your going to hand out money the logical step is to make it several payments. Though that would be less popular since that's just welfare. A measly one time shot of $500 isn't going to keep anybody in their homes. If it does keep anyone in their homes. It's only for another month hence the reason for several payments. So how about we cut the fat and just let them lose their homes rather than spend money the government already doesn't have for a placebo effect.




I support unions but, the UAW priced themselves out of a job($60+/hr). The management ran the company into the ground. A bailout is only prolonging the inevitable collapse of these companies. As long as people aren't buying cars so bailing out these companies isn't going to do anything constructive. I highly doubt we'll come out of this in the near future which further backs the argument against the Big 3 bailout. If we weren't in a severe recession/depression they could bail them out on the condition that the companies retool and restructure in return for the money.

The only theory I can come up with of how the bailout would work. The UAW takes a drastic pay cut, replace the current management with people who aren't incompetent. Retool to produce fuel efficient cars. Besides the problems with the UAW and the management. The American consumer still isn't buying cars )let alone hybrids or fuel efficient ones since gas is $1.60/gal).

I think in this case, the earlier stimulus represents a failed attempt by the government to control the recession. We'll have to wait to see what Obama and the dems do in terms of future stimulus packages. Public works projects, which achieve a similar effect by artificially creating jobs, are probably a better investment in this case, since the recession doesn't look like it will end quickly. Obama also seems interested in sending out a few stimulus checks though.


I pretty much agree with you that the Big Three in no way deserve to be bailed out. They ran themselves into the ground. Sans recession, they probably wouldn't be bailed out either. It just seems that at this moment, the economic damage that would be inflicted by letting them fail is more costly than the actual monetary cost of bailing them out.

Like what you and FPOD mentioned, they don't deserve to be bailed out, but the consequences of not bailing them out is even worse. I can't help but feel that bailing the big 3 is like throwing water in a bucket with a small hole in the bottom - it's still leaking.

Public work projects seem like a good idea. Our infrastructure is in serious need of assistance. There was a report that 60% of our bridges are in a critical state (I'm not sure on the actual number somebody needs to back me up or correct me). I'm sure people remember the I-35W bridge collapse. Not to mention the poor state of our roads in some areas. There could also be a new industry on recycling some of these houses that are becoming havens for less desirable. I believe there is an estimation of a surplus of 2 million houses in America. The banks are just sitting on these homes and when they do sell. They are sold at a loss for the bank so why not demolish them and resell the pieces?

I'm still not fond of the "stimulus" idea. No matter who puts the idea forward. Though if the stimulus was put forward with an equal amount of government cut backs then I would approve.

I'll say this about the idea of a stimulus package sent out to regular citizens - in the end, it will either not help those who get it or piss off those who get it.

The people who are doing well that get the stimulus will just buy something new, but it's not money they need.

The people who need money that get the stimulus will be able to pay their electric bill or water bill for a month, and that's it, as FpoD said. The next month, they could be screwed. This could lead to anger because the lower-income people would think, "Why'd they give money to the middle-class people when they don't need it, but I do?" or "What the government gave isn't enough to do anything. Did they really think this pittance would help any?"