I got a great email the other day why a good friend of mine thinks that this depression we are going into is going to be very different than the last one, regardless of all the doom and gloom. He said he didn't need to be credited by name and didn't mind my sharing, but I just want to assure you this isn't my own work. I'm not that economically savvy! However I thought his thoughts on our current situation and his prognosis was worth sharing.
As we discussed, we are already having a depression.
But this depression cannot play out like the last one for the following
- We do not currently have a drought causing dust bowl conditions and a
mass migration of agrarian workers ("Okees").
- The proportion of our economy dependent on an agrarian work force has
been vastly reduced.
- The national highway system did not exist then.
- The rural electrification program hadn't happened yet.
- We did not have our modern transportation systems.
- We did not have our modern communication systems.
- We did not have the Internet.
- We did not have such an interconnected global economy (it existed but
nothing like today).
- We did not have the general level of affluence that most people can
take for granted today (hot and cold running water for everyone, flush
toilets, a highly efficient food production system).
- None of those things are going to break down to any significant degree
under current economic conditions, no matter how bad things get.
- It would take a war of some kind to produce the type of conditions we
had to endure then.
- Remember, Europe was bombed to rubble, and recovered within 20 years
(really less) and is on par with the U.S. today in terms of general
- By the way, the "Marshall Plan" to reinvigorate the European economy
after WWII cost about 1/4th of what we are spending today, in today's
dollars, for us to bail out our financial institutions, car company's
etc. AND the new economic stimulus package that has just been passed.
- Sadly, the Bush administration has already spent as much on the war in
Iraq, as we are now spending on the above two packages (over 2 Trillion
dollars, more or less).
- Currently Japan has a larger national debt with respect to their GNP
than we do.
- Currently England's financial crisis and bank failures is even worse
- The whole world is in this together, so whatever happens, we'll have
to do it as a world.
- The biggest question is... how bad are governments going to fuck up
what needs to be done?
NOBODY knows the answer to that.
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