In reading the description of the Great Depression posted on the Encarta website, a great number of similarities strike me. As far as I’m concerned, we’re in the same boat. We’ve bought an enormous amount of things on credit, most Americans are in debt because of the prevailing idea of “consumerism”, of disposable goods that must be continually re-bought and renewed, and the stock market has just recently collapsed.
Here’s what’s written there: “Although the 1920s appeared on the surface to be a prosperous time, income was unevenly distributed. The wealthy made large profits, but more and more Americans spent more than they earned, and farmers faced low prices and heavy debt… These problems contributed to the crisis that began the Great Depression: the disastrous U.S. stock market crash of 1929, which ruined thousands of investors and destroyed confidence in the economy. Continuing throughout the 1930s, the depression ended in the United States only when massive spending for World War II began.” (1) Does this sound familiar to you?
I think what saved us from going into a full-blown depression now was entering into war with Iraq. The massive spending that took place to finance this money-losing operation (hundreds of billions so far) served to revive the economy to some extent, and the politicians managed to save our ship from sinking. The question is, how long will this temporary effect last?
In the 1940s, we financed our massive war spending through various methods, such as war bonds, loans and other such things. A lot of money was made available through the rationing of goods and the conservation of resources such as electricity and gasoline. After the war was over, there were an enormous number of contracts for American factories to fill overseas. None of that is happening today, though. Today, it’s mostly artificial. President Bush spent loaned money to finance the war in Iraq, and he’s spending more loaned money to finance the contracts for rebuilding Iraq. The contractors (Halliburton and others) are overcharging the government, and who is left as the scapegoat? Us, the regular taxpayers. Isn’t this crazy? We’re only going further into debt instead of coming out of it.
Where in the world do you think Congress gets the war money from? Debt! That’s where the money that government spends on big purchases has come from for years. But America is already deeply in debt. I hope that we’re all aware of how much in debt we are as a country. So tell me, what happens when you prop up an ailing economy by spending money you don’t have? I’ll tell you. You’re digging under yourself! And, what’s making it worse is that foreign investments in our government bonds are holding up our economy. China is fast becoming one of the biggest foreign investors, and when you have a communist country with their hand on your capitalist wallet, things aren’t quite right.
In order to counteract the possibility of an economic collapse, we’d need to get some very fiscally responsible politicians in the White House and in Congress. But does that ever happen? Nowadays, it seems that only fiscally irresponsible people ever get to either run for office, or stay in office. Sure, there are a few good senators, but there are far more overwhelmed people holding office, and their legislative votes only serve to worsen the situation. Regardless of who gets elected on November 2, 2004, the situation will not improve. Kerry is no better than Bush when it comes to dealing with the money situation realistically.
What’s to be done? I can’t predict the future, but unless we get someone in the White House who is willing to address the problem of debt head-on, I think our country is headed for certain disaster. You do the math, but economic collapse can’t be good for anyone.
(1) “Great Depression in the United States,” Microsoft Encarta Online Encyclopedia 2004.