Is This The Coming Of The Next Great Depression?

Yes it is, for we never even escaped the 2008 collapse. What is happening? To make bigger profits, U.S. multi-national firms aggressively shipped U.S. factories overseas along with their middle class jobs. Those jobs were replaced with lower wage retail jobs selling foreign made goods. In fact, U.S. wages adjusted for inflation are exactly what they were 33 years ago. Yet the cost of housing, cars, education, medical care and other middle class necessities kept rising.* So how did U.S. wage earners keep paying for them? They went deeply into debt like never before in U.S. history.

For awhile, everything appeared to work out well. Borrowing money was easy and the middle class thought it was not only doing well but had hit the jackpot, first in the dot com boom and when that collapsed, it seemed to be rich in housing values, riches it quickly borrowed. Then the housing market collapsed. Meanwhile, Wall Street made wild and greedy speculations and in 2008, that collapsed as well but unlike the middle class, Wall Street got bailed out, ironically at the expense of the middle class.

Meanwhile, the U.S. government keeps spending huges sums it doesn't have and puts it all on the U.S. taxpayer credit card. So no surprise, since 2008 the U.S. economy is floundering and sinking, taking the jobs market with it. Even as its deficits and debts soar, Washington answers with no new taxes, as it expands its military spending and wars, in part because that military spending employs millions of Americans, ironically also at taxpayer expense.

Americans are frustrated and angry. Public surveys show a 9% approval rating for Congress for example. Yet the huge campaign contributions still pour in because the elite are well served by the current system and they refuse to share in any significant sacrifices. While at the same time, the Euro Zone is crumbling and will take numerous European and U.S. banks with it, as they will again line up for bailouts this time from governments that won't be able to provide them. As they crumble, so will the export dependent Asian economies.

So what can you do to protect yourself from the coming Depression? Lighten your load by paying down your credit cards and selling off anything you no longer need, such as an extra car, boat or motorcycle. If you have a house to sell, sell it now before prices drop further. At work, cross train and offer ideas that generate revenue or save money, for these things make you more valuable to your employer. And as happened during the last Great Depression in the 1930's, we must unite to help one another through the difficult times to come. When those times end, we will hopefully rebuild with a U.S. economy no longer based upon bringing military Hell to the world but one based upon medical, educational, social and environmental advancement that can make this world a far better place.

Dick
*According to the U.S. Department of Labor, the urban Consumer Price Index is 3.5 times what it was in 1978. http://research.stlouisfed.org/fred2/data/CPIAUCSL.txt. But as bad as this is the prices for some essentials such as housing, cars, education and medical care have spiked much more.