It looks like you're using an Ad Blocker.
Please white-list or disable AboveTopSecret.com in your ad-blocking tool.
Some features of ATS will be disabled while you continue to use an ad-blocker.
The Great Depression was a worldwide economic downturn starting in most places in 1929 and ending at different times in the 1930s or early 1940s for different countries. It was the largest and most important economic depression in modern history, and is used in the 21st century as an example of how far the world's economy can fall. The Great Depression originated in the United States; historians most often use as a starting date the stock market crash on October 29, 1929, known as Black Tuesday. The end of the depression in the U.S is associated with the onset of the war economy of World War II, beginning around 1939.
When the expenditures of a government (its purchases of goods and services, plus its transfers (grants) to individuals and corporations) are greater than its tax revenues, it creates a deficit in the government budget; such a deficit is known as deficit spending. This therefore causes the government to borrow capital from the 'world market', increasing further debt, debt service (interest) and interest rates (See: "crowding out" below).
Main article: Crowding out
When a government borrows, generally it accepts bids, which are measured in terms of their interest rate. When a government borrows, it captures as bids exactly as much funds as it needs.
To other borrowers, be they corporate, state or smaller, after the central government borrows at the bid interest rate, that interest rate has become the base for the prevailing interest rate.
When a government borrows, it must borrow. To the corporate borrower who must see the possibility of profit from borrowing, the interest rate becomes a limbo stick, and a time comes when they can no longer afford to borrow. They are then said to be "crowded out".
This aspect of deficit spending puts the death knell on economic recovery and sends an economy into a deep downward spiral.
Surviving the greatest Depression of the 21st Century
LONDON (AFP) — The chief executive of US bank JPMorgan Chase, Jamie Dimon, told the Financial Times on Thursday that the worst of the economic crisis still lay ahead as hard-hit consumers default on their loans.
"The worst of the economic situation is not yet behind us. It looks as if it will continue to deteriorate for most of 2009," he told the business daily.
Economists described the US economy as “in absolute free fall”. Nigel Gault, chief US economist at Global Insight, said: “Confidence has collapsed.”
The Labour Department reported that 533,000 workers had been laid off in November, 183,000 more than expected. It also said that almost 200,000 more people than originally thought had been dismissed in September and October. There are now 10.3 million Americans out of work, two million more than the population of New York City.
Many banks experiencing shortages of cash were forced to liquidate assets at fallen price levels and were thus driven to insolvency. The federal government was not offering bailouts, believing that in every case it would be throwing good money after bad. Those banks that were sound enough to have benefited everyone from a bailout were allowed to fail. Depositors lost confidence in the financial system. They didn't know which banks were sounder than others and pulled their money out of all banks, good and bad, indiscriminately. People across the nation were putting their money into safe deposit boxes or stuffing it into mattresses. In 1931, 2,294 banks in the U.S. failed.
When House members today approved the $700 billion financial-industry bailout bill, they also voted to approve dozens of so-called "tax extenders." Fiscal watchdogs have another word for these "tax extenders"--pork.
Tucked into pages 262 and 263 of the bill, for example, are provisions that will aid the manufacturers of "certain wooden arrows designed for use by children." The bill will exempt the arrows from an excise tax of 39 cents. There are also tax breaks for race-track owners, for rum imported from Puerto Rico, for worsted wool makers, Hollywood film and television production companies and on and on.
In Washington D.C., 3,000 Communists staged a "hunger march." In rural America farmers were joining together to prevent insurance companies from foreclosing their neighbors' farms. In the spring of 1932, 15 to 20,000 unemployed veterans camped out in a park in Washington D.C. demanding full payment of the bonus promised them for serving in World War I, and they were dispersed by the U.S. army.
In Europe, on the other hand, many were blaming the Depression on the United States. They blamed the collapse in Europe on the U.S. withdrawing loans even to sound enterprises. And people blamed the United States for cutting back on imports and for failing as the world's leading creditor nation.
Marxists had their own analysis of what was causing the economic crisis. In 1928 the Communist International (Comintern) claimed that capitalism was entering its third stage since the Great War: stage-one being the crises just after the war; stage-two the recovery that followed in the mid-twenties; and stage-three being a crisis created by the old problem of production out-racing consumption. By 1932, rank and file Communists were impressed by the Comintern's analysis. With Karl Marx having predicted the fall of capitalism, they saw capitalism as having entered its final crisis. The failure of capitalism, they believed, would bring the discontented masses falling in behind Communist Party leadership and then they would be able to overthrow the capitalist system - matching economic inevitability with human activity.
Decades after the Depression, "bourgeois" economists would argue that the Depression was more than just production out-racing consumption. Monetary stability after World War I had not returned to what it had been before the war. Before World War I, Great Britain had been the world's creditor nation, the world's lender of last resort and the world's champion of free trade. This had been destroyed by the war, and, according some economists, the United States had not adequately taken Britain's place as the world's leader in finance.
Originally posted by xynephadyn
However, I dont see people giving a hoot about their neighbor in this age. Just in the past 30 years, we have seen that neighbor and neighbor - rarely share a glance, much less a cup of sugar or a BBQ. No- people will be like animals when this comes. And I for one- am prepared for it- and so should they. We cant pity the ignorant. There is too much information out there now. It was their choice. Dont get me wrong- i love people and help people as a profession, but i wont risk my life for theirs because they didnt prepare.