Sunday, February 15, 2009
Like the Great Depression? Or just your run of the mill recession? For You Naysayers
For the economists from the CATO Institute read this.. out there who think we aren't even close to the 1930's Depression. I decided to post this chart from dshort.com again.
I happen to think our current crisis is worse, in three ways:
1) housing booms have consistently brought us out of depression/recessions in the past. That tool is over, unless of course the government decides, and I think they might, to bulldoze whole abandoned housing communities so we could start over;
2) lowering interest rates have always helped by enabling consumers to get cheaper mortgages to buy those homes being built in the housing boom that is taking us out of a recession. How much lower than ZERO can we go?; and
3) how many americans want to go through World War III just to prove a point? Incidentally, turns out WWII may not have brought us out of The Great Depression after all, according to author Amity Shales, who argues that the recent crisis lies at FDR's feet for his failed New Deal (not something I subscribe to mind you, but it is out there and getting alot of press).
But just one look at these charts should give one pause! What do you think?