As the economic carnage from the coronavirus pandemic continues, a long-forbidden word is starting to creep onto people’s lips: “depression.”
In the 19th and early 20th centuries, there was no commonly accepted word for a slowdown in the economy. “Panic” was the term typically used for financial crises, while long slumps were commonly called depressions.
The Black Death, or The Black Plague, was one of the most deadly pandemics in human history. It began in South-western or Central Asia and spread to Europe by the late 1340s. The plague may have reduced the world population from an estimated 450 million down to 350–375 million in the 14th century. The human population has been reduced several other times in history due to major epidemics.
Smallpox (430 BC? – 1979):
Killed more than 300 million people worldwide in the 20th century alone, and most of the native inhabitants of the Americas.
Spanish Flu (1918 – 1919):
Killed 50 to 100 million people worldwide in less than 2 years.
Typhus (430 BC? – today):
Killed 3 million people between 1918 and 1922 alone, and most of Napoleon’s soldiers on Russia
If and when there is a ‘next’ Great Depression (some may argue that we’ve already entered the next one – although hidden from sight), the question is “How will it be different from the first?”
The economic damage from coronavirus, however, threatens to dwarf the 2008 downturn.. The current labor force participation rate is somewhere around 62% in the U.S. and the current (NOV-2020) combined U3 & U6 unemployment numbers reflect 22.8% (source: ShadowStats.com). Apparently, there are about 44 million people receiving food stamps while nearly 14% of Americans live below the ‘official’ poverty threshold (hinged to income and family size).
The U.S. National Debt is just about to turn over to 28 Trillion dollars. Unfunded liabilities are currently 156 Trillion dollars (source: usdebtclock.org). On average, each household with a credit card carries more than $15,000 in credit card debt, and the average U.S household with debt owes $130,922 (source: time.com).
According to a recent Federal Reserve report, nearly half of Americans couldn’t cover a $400 emergency expense without borrowing the money or selling something. Additionally, almost 40% of people report having a zero balance, and 70% have less than $1,000 in savings, according to a recent survey (source: GOBankingRates.com). An additional 24% report having no savings account whatsoever.
Today, Americans are once again facing the consequences of a failure to act, and a mistaken belief that a miracle solution is on its way. The past has already shown that there is a better way forward—but as the coronavirus crisis continues, it only seems more likely that FDR’s is not the history Trump plans to repeat.
We as Americans are really not wealthy. Rather, we as Americans are drowning in debt while putting on a facade of phony wealth. Most do not own anything. The banks do. And guess what? The banks are in trouble too. The Federal Reserve (a private organization) has essentially been propping up the banks (and ‘the market’) since 2008 – and it’s all based on more gargantuan debt.
While most Americans are entirely clueless about the big picture here, one day (or over a period of time), we may descend further into a ‘Greater Depression’ as so many of the so-called ‘asset classes’ collapse in value as they seek out their own ‘true value’ when they cannot be propped up anymore.
Okay, back to the question at hand… How will the next Great Depression be different?
Recently, a commenter here said,
The “great depression” lasted somewhere around 10 years…. 80% of the population lived on farms-ish, I would bet that 90% of those had a HUGE-deep-pantry, and already had Gardens and Livestock. In 1935 there were around 127 million in the US, now 320-ish million, IF the “greater” depression hits and 80% are in the cities….. Just something to think about.
Someone else said,
“…but the greatest loss is the knowledge of survival. In the “great depression” many survived by riding the rails to areas that needed farm labor – try that with most urban dwellers today. Not only are they not physically able but are totally ignorant about agriculture, nature, and most of all, being able to cooperate in a rural society.”
A few of my own thoughts…
Back during the Great Depression, people had a MUCH GREATER sense of morality, work ethic, and practical skill sets than they do today.
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There is a tremendous number of people today who have not experienced real hardship. They have been coddled, they have had things handed to them, and they EXPECT to be taken care of. They get angry when they don’t get their way.
During the days of the Great Depression, people on ‘assistance’ had to line up to receive their benefits. It was very visible. Today, ‘digital cards’ hide all of that. The numbers of those receiving benefits are hidden from view and all ‘appears’ as normal…
Today, it’s easy to get a bank loan for just about anything. Back during the days of the Great Depression, people taking on loans was significantly less. They had to save and work for ‘it’.
Family farming and agriculture today is essentially non-existent compared to the years of the Great Depression.
People have no idea how large of a garden and the right kinds of foods which will produce adequate calories to help over-winter for their household. A few tomatoes and squash in a 10×20 garden is not going to cut it…
How many people do today know how to preserve their own food (e.g. canning)? I would say VERY, VERY FEW.
Because most Americans suffer from extreme ‘normalcy bias’, a Greater Depression will be shocking and devastating, to say the least. Many will lash out as the cities burn… (perhaps literally).
People today are NOT educated the same way as back then. Practical skills are all but ‘gone’. Used to be that many would learn some technical trades in High School and some would go on to a trade school afterward. Whereas today, ‘everyone’ (even those who really aren’t that bright) has to go to ‘college’ where they’re taught diversity training, political correctness, ‘Dem’s Good – Repub’s Bad, etc…
Today, our manufacturing base is GONE. Back during the Great Depression, we made ‘stuff’. When a nation makes their own ‘stuff’, that’s a good thing…
The upcoming ‘Greater Depression’ may likely last even longer than ‘the Great Depression’ of the 1930s and will have far worse consequences for more people than ever before.
The Great Depression that took place during the 1930s was a severe worldwide economic depression, the timing of which varied across nations; however, in most countries, it started in 1929 and lasted until the late 1930s. It was the longest, deepest, and most widespread depression of the 20th century.
If (when) the next ‘Greater Depression’ hits us smack in the face, you might want to be prepared to survive a minimum of 5-10 years, relatively on your own, without.gov assistance.
Today, the vast, vast majority of people live in urban and suburban areas and most have not ever been to a farm. The extent of their knowledge of farms is the extent of which they may have seen pictures on Google, Bing, or Yahoo…
During the 1930s, many or most people knew how to take care of their basic needs on their own. Many or most people knew how to grow a successful garden. Many or most people were familiar with the physically laborious way-of-life during that time when luxuries were few and hard work was the normal reality. People (in general) were not as ‘soft’.
During the 1930s, many or most people had a sense of morality and decency that pales in comparison to today. That morality certainly curtailed what could have been much worse with regards to societal problems during that time.
The American culture was vastly more independent and self-sustaining than today (putting it mildly), whereas the modern way-of-life has become extraordinarily dependent.
Government during that time was still relatively small and non-intrusive, whereas today’s government is intermingled with most everything that we do, debilitating individualism and regulatory to the extent of crippling.
A ‘government class’ has exploded into a gargantuan chunk of our society – creating dependence rather than independence. A ‘Greater Depression’ during today’s modern times would become particularly devastating to all those who ‘depend’.
During the time of the Great Depression, the world was severely affected. Today, even more, most of the world’s nations will be affected – as they are financially and economically hinged with systemic risks in ways that were not even dreamed of back then.
I cannot help but contemplate how much worse it would be today than it was back then in the 1930s, especially knowing how bad it actually was at that time. We tend to think and believe that no such thing could ever happen again, especially given today’s safety nets and the seemingly endless crops of dollars continually harvested from the unseen fields of money trees. We are so far removed from the hardships of yesteryear that these thoughts never enter the minds of most. However, it may be wise to at least ponder the thought…
Oh, and one more thing… remember what got us out of the Great Depression? WWII.
History may or may not repeat itself, but it certainly rhymes…
In conclusion, my general opinion is that the next Greater Depression will be a complete disaster, and it will become violent as the waves of desperation wash over the land. We are a different people than back then, and it’s going to bite us in the a$$…
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