With a Huge Deficit, Are we Heading Towards Another Great Depression?

[Ava]

During his first Fireside chat on March 12, 1933, President Franklin Delano Roosevelt discussed the Bank Crisis in America. In the little over 15-minute informal address, the President spoke about the beginning of the process to reform the financial system, specifically discussing in this chat the banks. Many Americans, frightened by the ongoing Great Depression and the downfall of Wall Street and the trade industry, were swarming to the banks in order to withdraw money, causing the banks to be forced to close down due to in a short summary, running out of money. During the chat President Roosevelt warned Americans about how this was hurting the economy and put discussed with them the plan to reform the financial system.

From 1933 forward, President Roosevelt began creating reform programs known as the New Deal. The programs were created to stimulate demand and to proved work and relief for the many Americans living in poverty at that time. Government spending was increased by reforming the financials system - especially the banks and Wall Street, creating regulations that kept forcing down prices and profits for everyone, setting and enforcing minimum pices and wage regulations, creating competitive conditions in the industries, encouraging unions to raise wages causing an increase in the purchasing power of working class Americans, and cutting farm production to raise prices and make it possible to earn a living and support a family by farming.

Most of this was done by the NRA, or the National Recovery Agency, which was one of the most controversial aspects of the New Deal agencies because it orded businesses to work with the government in setting price codes, and it also orded the National Recovery Agency board to set labor codes and standards. It is perhaps thanks to Franklin Delano Roosevelt's New Deal and the Nation Recovery Agency that we have minimum wage restrictions nationwide in America today. Although minimum wage restrictions weren't applied nationwide until 1938 they were most likely influenced by the New Deal programs from 1933 to 1937.

It is scary to think about what would happen today if we were to go into another Great Depression. Right now as it stands the United States has a huge amount of debt caused by the war and George W. Bush's tax cuts for the richest ten percent of Americans. If we are not careful and continue down the same path we very well may end up living another Great Depression, and this time we don't have a President Roosevelt to save the country. Instead we have a President who seems to be helping the richest of Americans with tax cuts and laying the debt that he has created on working class citizens and unfortunately the next generation to come. Recently congress raised the minimum wage to help blue collar Americans, but with the huge tax cuts for the rich and the overwhelming cost of an ongoing war, it isn't much help, especially considering the amount of taxes the working class has to pay will increase with the minimum wage, leaving them not much better off than before the wage increases.

The New Deal and the National Recovery Agency plan to reform the financial system worked during the 1933 to 1937 New Deal era, but would it work today? It is most likely thanks to Americans buying more American made products during the 1930's that the plan worked, but today, thanks to globalization of the economy, Americans heavily rely on products that are made outside of the United States so the money spent on those products is not coming back to Americans and helping our economy. The integration of trade with corportions stationed all around the world has heavily increased. Because of this, a New Deal plan would most likely not work today, because the United States would not have the control over production of goods they once had. If America were to cut off trade with foreign companies and American companies outsourcing jobs to poorer countries for cheaper labor, perhaps a New Deal would work again, but as it stands a plan like that which worked in the 1930's would most likely not work again. So if we are heading towards another Great Depression, what will be our New Deal?

[Taverner]

1. Bookmarked for the future

God I hope not

[villager]

2. Bush is Hoover, but worse.

I think the question is, could a Hillary be another FDR? Could Obama? Edwards?

Someone will have to stand up to the interests of the corpocracy, and frankly, "share the wealth" again...

[JacksonWest]

6. Bush is like a Vampire-Mummy Hoover. And he smells worse.

Also, he eats his own poop.

I hate vampire-mummy Bush. I'd tell him to eat shit....but he's enjoy it.

Fo shizzle.

[slackmaster]

3. Great Depression was not caused by a federal budget deficit

[Ava]

4. read the post

not just the title

[JacksonWest]

5. The point of the New Deal and the reforms(such as the federal backing of all bank account up to

100 grand would prevent that scenario from happening. So, either the catastrophe will be prevented...or it will be a brand new disaster. The big problem that led to the great depression wasn't the stock market crashing-it was the fact that banks were not well regulated and a lot of people lost their money-people that didn't' even have it in stocks.

As it stands, the thing that really ended the great depression was WOrld War 2, which amped up production, cut costs, and was a fun time for all involved. All those that didn't get killed or mutilated.

Any-hoooo, the greatest generation aside-don't worry. We're not in a financial crisis, and the Great depression can't repeat itself. Fortunately, there all sorts of other ways we can destroy ourselves-and probably the rest of the planet.

Here's a link to the current stats:
http://www.whitehouse.gov/omb/budget/fy2007/sheets/hist01z3.xls

Our ratios aren't all that bad- and the growth and receipts are on par with recent history.

So, my advice, worry about a virus, nuclear bomb, coup, angry aliens(not moonites) global warming, killer bees, Dick Cheney, and dozens of other things that will probably kill you first.

[no_hypocrisy]

9. Conceded that the Great Depression and the $82 trillion federal

debt are distinguishable, but how do you predict the debt to have an impact in the future?

Obviously the debt must be paid back. How to do that and decrease the principal? The interest alone is compounded and growing and we can barely pay that.

Does the future include printing more money, diluting the value of the dollar, and incurring inflation? Or does it mean our creditors will realize they don't have a cheery prospect of being repaid and will no longer finance our debt? How will that affect our ability to function with the transfusion of money?

[JacksonWest]

12. We've eliminated larger debts(ratio) in the past, and we can do it in the future.

Every budget involves paying various debts, so if you want to have zero debt...work for that. Also, the fed debt is 8 trillion.
http://www.brillig.com/debt_clock/

We don't this to one person named Brutus, it's just a part of doing business. If we got rid of it tomorrow-sweet. No more interest payments.

The key to paying it down is as simple as diverting money from one thing and putting it in the other. This is why we have elections, and political parties-right?

[LSK]

7. Ava, you are partially wrong about the Minimum Wage bill

The tax cuts are for small businesses and to pay for it, there is an increase in taxes on people making over $1million per year.

The Senate overwhelmingly passed this yesterday and it is headed back to the House for their approval.

In addition, if we ever got behind mr Gores global warming innitiatives, there is a HUGE industry waiting to be created in alternative energies. I read somewhere once that new technology produces new wealth and I believe that can happen again here.

[Ava]

11. i actually wrote this blog post last friday

so i guess i wasn't wrong then, lol ;)

[LSK]

13. good point

;)

[Parisle]

8. Here's what it comes down to,....

--- We have to absolutely, once-and-for-all RID ourselves of the fairy tale that the best interests of the nation and of the people at large,.. are IN ANY WAY a parallel function of the corporate bottom line.

--- IF 30 FUCKING MILLION PEOPLE STARVED TO DEATH IN THE US LAST YEAR, AND THE DOW WAS "UP" FAVORABLY, THEN THE CORPORATE ELITIST OLIGARCHY WOULD NOT NOTICE, NOR BE CONCERNED WITH THE AFORE-MENTIONED STARVATION DEATHS. THEY WOULD CONSIDER IT A GOOD YEAR. ---

--- STOP letting rich corporatists make all the goddamned decisions. Hell,.. put thirty or forty of them in prison for life,... maybe let a few others say their final good-byes to a small group of sharpshooters,.... and the sons of bitches would quiet down for a while.

[catmandu57]

10. I hope not

I'm too damn old to deal with such a calamity. In spite of all the rah rah cheering, I can feel our economy teetering like a broken leg on a three legged stool.