Community | July 02, 2010 | 8 comments

Is the world on the brink of another world wide depression?

source: http://www.globalpost.com/dispatch/commerce/100629/global-economy-depression

jubal
Although the video may be funny, the issue is deadly serious. Most people alive today will not remember the horrible world wide conditions that existed during the early 20th Century. Are we on the verge of another go around the merry-go-round of economic collapse?
  1. groups:
    Community,   News and Politics,   WTF,   Current Tonight,   4 more
  2. tags:
    Money,  Fiat Currency,  Finacial crisis,  Global Depression
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8 comments // Is the world on the brink of another world wide depression? // Video

  • Armageddon_Now
  • Robotic091
  • ocanada
    • +1
      ocanada  

    • I'm with Keynes on this one but not Obama. My family was saved by the CCC and the WPA as were many other families during the Depression. Practical examination of history shows that when FDR reacted to political pressure to manage the growing debt his public works projects had caused the recovery ended and the recession deepened.

      Not every program FDR managed was either efficient or successful but their combination proved of enormous effectiveness and did something that Hoover and the Austrian School didn't manage in their four years in power before FDR, the fundamental dignity of workers. They wanted jobs, and jobs are what is still being cried for in the streets. Obama chose to focus on stabilizing the global economy through capitol injection based on political pressure from republicans who favored an entirely tax based approach.

      Tax cuts have a limited multiplier affect and ultimately the Austrians are right about culture being hard to steer with policy. However direct spending on job creation has a multiplier affect and gives an added bonus of capitol investment in our crumbling infrastructure both social and physical. Estimates are that more that three trillion dollars in repair is needed to our current over strained national infrastructure which crumbles in every storm, every new season is calamitous without just cause. Bridges collapse as in Minnesota, water mains burst as in Maryland and Boston, and entire major population centers are inundated as in Nashville and New Orleans. In the most powerful nation on the Earth we behave meekly. I'm with Keynes, imperfect figure he may be Hoover he is not.

    • 1 year ago
  • jubal
    • 0
      jubal  
    • ocanada:

      The whole problem is that how can you fix a system that is based on fiat currency to begin with? How can you stop the wind from blowing down a house of cards?

    • 1 year ago
  • ocanada
    • +2
      ocanada  
    • jubal:

      The problem is an assumption that the house is that fragile. The U.S. bond market is actually the strongest in the world and our economy as the largest consumer in the world has more absorptive capacity than any other nation in the world in response to direct investment. What is more damaging for us is to have long term unemployment, and the whole world sees it in their interest as bond holders in the U.S. to see us spend more while they attempt austerity measures. The president disagrees rightly so and believes that a more global decoupling is needed to stimulate internal consumption in the Eurozone, China, and the developing world which will lead to less interdependency and allow a sustainable climb out of this crises without another boom to lay the foreground for a second calamitous bust. I make no assumptions that this system isn't complex, but on practical aproach the Austrian theory has never faced such large challenges and deregulation is what got us into this mess in the first place. If we worry too much about debt we risk both deflation and an interminable jobs crises which would lead to further collapse.

    • 1 year ago
  • jubal
  • ezrierin
  • jubal
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