How bad could the economy get, realistically?

[Sensei]

discuss

[ChrisFromNJ]

Vast unemployment. The type of unemployment we haven't seen since the 30s.

Quite a few corporations could go bankrupt.

The majority of small businesses would be unable to survive.

Personal credit dries up.

None of us on this forum have ever seen a recession the likes of what will happen over the next few years.

[Eraserhead]

Isn't General Motors on the death watch? I mean, GM?

Bro, this looks pretty bad.

[Ban my account ffs!]

I hope not too bad.

Some indicators here in Minnesota are showing signs of life in the housing sector... unfortunately the national economy could really drag us down.

[Person Man]

Here are a few practical questions-

1- Will most of us be living with family?
2- Will we have enough to eat?
3- Will we be able to fuel our cars?
4- Will we have a place to go if we have no family?

[Rules for me, but not for thee]

Here are a few practical questions-

1- Will most of us be living with family?
2- Will we have enough to eat?
3- Will we be able to fuel our cars?
4- Will we have a place to go if we have no family?

1- If I lose my job or times get hard, I'm going to either move back home and try to ride things out with my mother, and personally prepare.  Otherwise if I can't make it back, try to group with friends here.

2- Good question.  I don't know, we don't have the drought/dust bowl that exacerbated the Great Depression, so it should be better than those days.  But, still it could be like Katrina, people looting stores leaving them empty.

3- This will be the first thing to go, I already got a taste of it here in Nashville just a couple weeks ago.  If every starts panicking for gas, it'll go quick.

4- It it gets really bad - find your friends, combine food, firearms, gold and valuables and make sure you have someone you can rely in.  Preferably whoever is most remote and has the most land, so you can grow crops to feed yourself and get water from a well.

[dead0man]

It won't go totally tits up until everybody refuses to loan money to the Feds and that wont happen all at once.  And when that happens we'll just start a war with somebody....probably China.  This wont be happening anytime soon.

Feel free to continue the fear mongering though, it's funny.

[opebo]

It won't go totally tits up until everybody refuses to loan money to the Feds and that wont happen all at once.  And when that happens we'll just start a war with somebody....probably China.  This wont be happening anytime soon.

Feel free to continue the fear mongering though, it's funny.

No one needs to 'loan money' to the government - in a deflationary environment they just create it by fiat.  'Print money' as they say.  Another way of putting this is that the government simply orders things done.

It isn't fear mongering, deadman, when there is precise historical precedent.

[Sam Spade]

Oh, it can get pretty bad.  You see, with the exception of the housing market and the obvious loss of personal savings in the stock market, the impact really hasn't been felt *very much* at the Main Street level just yet.  That's gonna change in about six months or so.

You'll know we're in really bad shape if you get the "deflationary spiral" and the government starts imposing currency controls.

As to where exactly it'll hit right now, I have no clue.

[Wakie]

Worst economic crisis since the Great Depression.

[Filuwaúrdjan]

No way of telling 'till we're there, is there.

[Person Man]

It won't go totally tits up until everybody refuses to loan money to the Feds and that wont happen all at once.  And when that happens we'll just start a war with somebody....probably China.  This wont be happening anytime soon.

Feel free to continue the fear mongering though, it's funny.

That's how Germany, Japan and Italy got through the depression. Socialism is how the USSR got through the depression. Maybe if we could fight the depression my nationalizing the entire economy and lobbing nukes at all of the people we secretly or overtly want to get rid of. Then, the president can declare himself Lord of all Humans. Cesearianism- I LOVE IT!!! It would really fall into Straha's idea for a universal state. So much fun, so little time.

[○∙◄☻¥tπ[╪AV┼cVê└]

Bad

[Aizen]

Why don't we just print more money? Wouldn't that solve our "economic crisis"?

[opebo]

You'll know we're in really bad shape if you get the "deflationary spiral" and the government starts imposing currency controls.

You are very right that the real suffering won't be for a few months or so yet - by real suffering I mean the massive increases in starvation and homelessness.

But there need be no deflationary spiral if government spending rises around 25-35% next year.  I advise the immediate institution of a thousand dollar a month universal dole, free health care, and a $15/hour minimum wage.

[jamestroll]

Why don't we just print more money? Wouldn't that solve our "economic crisis"?

Uh,

That is NOT how it works.

[opebo]

Why don't we just print more money? Wouldn't that solve our "economic crisis"?

Excellent, Aizen!  You understand economics.  Though with the one caveat, as Keynes taught us - the printed money should go to the bottom of the economic pile as much as possible.

Another way to look at fiat money spent bottom-up is just an alteration of what government forces us to do - a slight reduction in privilege.

[opebo]

Why don't we just print more money? Wouldn't that solve our "economic crisis"?

Uh,

That is NOT how it works.

That is precisely how it works, jamespol.

[MODU]

Well, when you consider we haven't even reached the halfway point (if you compare this sell-off to those under the tech bubble and the crash of 1929), you could see another 2000-3000 point drop before things rebound.

[© tweed]

Dow has rallied to 8400+

[Sam Spade]

But there need be no deflationary spiral if government spending rises around 25-35% next year.  I advise the immediate institution of a thousand dollar a month universal dole, free health care, and a $15/hour minimum wage.

I doubt that would help any.  Probably make things worse actually.

[TheresNoMoney]

Why don't we just print more money? Wouldn't that solve our "economic crisis"?

I'm no economic genius, but that would just lead to a futher devaluation of our currency. in Kind of like when a corporation issues more shares, the total value stays the same, but each share of stock becomes worth less.

So it would solve nothing.

[Sam Spade]

Why don't we just print more money? Wouldn't that solve our "economic crisis"?

I'm no economic genius, but that would just lead to a futher devaluation of our currency. in Kind of like when a corporation issues more shares, the total value stays the same, but each share of stock becomes worth less.

So it would solve nothing.

Plus, printing more money/slashing interest rates does not necessarily get you out of the currency deflation spiral when a credit bubble is collapsing.  The credit market has to reform in order for any of that to make a difference.

[??????????]

This isn't even 1/2 of the Great Depression. If you want to know how bad the Great Depression was go ask one of your grandparents, especially if they didn't live in the Northeast. I've heard all the stories, even the poorest aren't there.

[Filuwaúrdjan]

This isn't even 1/2 of the Great Depression. If you want to know how bad the Great Depression was go ask one of your grandparents, especially if they didn't live in the Northeast. I've heard all the stories, even the poorest aren't there.

My Grandad lived in a different North East and always insisted that the Depression began in the mid '20's (which from a parochial perspective is actually true, although things got even worse when the Great Depression proper started).

Of course the thing about the Great Depression is that only got as ghastly as it did because of criminally stupid policies in the first couple of years after the Crash...