Depression Or Just An End To Affluence?
Are we headed to something like the Great Depression?
There is clearly much to be worried about. Most of America’s private retirement 401(k) accounts have significantly decreased in value since last autumn’s crash. Home equity has plunged. The unemployment rate is above 7% and climbing.
We had negative GDP growth last quarter. Stock prices are the lowest in 10 years. Almost daily some company announces layoffs. Some big banks may be nationalized. The American auto industry will not survive as we have known it for nearly a century.
Abroad, the news is worse. European banks have lost trillions of euros in bad loans to Eastern Europe and Asia. Countries like Iceland, Ireland and Greece are teetering on insolvency. China’s export industries may have to lay off millions of workers.
Given all that news, we are in a funny sort of depression. Our spiraling national deficit is being financed by China, Japan and other overseas concerns at almost no interest — saving the U.S. trillions of dollars in debt-service costs.
Nearly 93% of those Americans in the work force are still employed. The difference between what the banks pay out in interest on depositors’ savings and what they charge borrowers for loans is one of the most profitable in recent memory.
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Refreshing viewpoint you got there! I didn’t know that 93% of employed Americans are still employed… Maybe less hours and pay, but still nonetheless employed! We’re not as deep trouble as many are thinking, I guess. Maybe there reason why people are panicking is because their lavish lifestyles can’t be funded anymore and people can’t be as lazy as they used to get away with.