Have the Last 5 Years Been Worse than the Great Depression?

What Do Economic Indicators Say?

We’ve repeatedly pointed out that there are many indicators which show that the last 5 years have been worse than the Great Depression of the 1930s, including:

Mark McHugh reports:

 Velocity of money is the  frequency with which a unit of money is spent on new goods and services.   It is a far better indicator of economic activity than GDP, consumer prices, the stock market, or sales of men’s underwear (which Greenspan was fond of ogling).  In a healthy economy, the same dollar is collected as payment and subsequently spent many times over.  In a depression, the velocity of money goes catatonic.  Velocity of money is calculated by simply dividing GDP by a given money supply.  This VoM chart using monetary base  should end any discussion of what ”this” is and whether or not anybody should be using the word “recovery” with a straight face:

In just four short years, our “enlightened” policy-makers have slowed money velocity to depths never seen in the Great Depression.

(As we’ve previously explained, the Fed has intentionally squashed money multipliers and money velocity as a way to battle inflation. And see this)

Indeed, the number of Americans relying on government assistance to obtain basic food may be higher now that during the Great Depression.  The only reason we don’t see “soup lines” like we did in the 30s is because of the massive food stamp program.

And while apologists for government and bank policy point to unemployment as being better than during the 1930s, even that claim is debatable.

What Do Economists Say?

Indeed,  many economists agree that this could be worse than the Great Depression, including:

Bad Policy Has Us Stuck

We are stuck in a depression because the government has done all of the wrong things, and has failed to address the core problems.

For example:

  • The government is doing everything else wrong. See this and this

Quantitative easing won’t help … it will only make things worse.

This isn’t an issue of left versus right … it’s corruption and bad policies which help the super-elite but are causing a depression for the vast majority of the American people.

The government and the banks are doing all of the wrong things. See this and this.

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  • Anonymous

    Someday the masses will know this was all done deliberately by deeply evil sociopaths intent on creating their perverted vision of Utopia.

  • nobodysaysBOO

    EVERY American CITIZEN knows this already! OF COURSE this is the WORST TIME in AMERICAN HISTORY with the most corrupt criminals on earth in our US government! The most HORRIBLE excuses for presidents and every branch of OUR GOVERNMENT!

    • Rich H

      Sometimes I wonder why I post on this site.

  • Mark McHugh

    Thanks for the mention GW!
    What’s so terrifying about the current depression is the number of people still talking like capitalists when in actuality they are nothing more than welfare recipients themselves. The price of keeping that illusion intact is going up exponentially. In my opinion, there is zero chance that the Fed can bridge this valley, but every time they try, the size of the potential collapse gets bigger and so the desire to prevent that collapse gets stronger.
    The evidence clearly says it’s worse than the great depression, but we can’t feel it because we’re so doped-up on easy money. When the smack wears off, it’s going to hurt like nothing we can imagine. Of that I’m sure.

  • Rich H

    Worse, I don’t know. Possibly. During the depression one of my parents was sent to live with his uncle on a farm because they couldn’t afford him – while his mother resorted to selling needles and thread door to door. The other recalls the months (or years) they lived on soup and bread.
    As for me, I’ve missed more meals in the past four years than I’ve had. Business is bad, foreclosure looms, but I still have a roof over my head, right? The official government unemployment rate for where I live is 16%, and we all know to get to the correct figure you need to double it.
    So yes, it’s bad.

    • Aman

      So why dont we all just stop giving the rich money. Lets get extra comfy with the lifestyle we have now, keep cutting where we can, spending as little as possible saving as much as possible. Helping family and close friends within our means and commence a fiscal siege on the establishment. Im not ecstatic with my finances but im ok, i can even afford to give a bit and pay extra for small business products when i see them and i make less than 10,000 a year in south florida. I also live by myself, smoke (tobacco), have pets, and gourmet coffee. I cut all internet and cable but the phone (virgin mobile no contract)smoke a pipe, chicken and veggies for dinner, oatmeal and grits for breakfast, eggs for protein, i ride a motorcycle (70 mpg, no insurance). I have a girlfriend and a social life. Im happy, would like a bit more though. But as they say attitude is everything.

      Peace blessings and prosperity to all of you

  • EnergyCentrist

    The people who stood between us and the complete lockup of the financial system – Paulson, Bernanke and Geithner – did the only thing they thought might help: throw money at The Beast. I don’t accuse those guys of being ill motivated, although many do, including the present essayist. When Lehman Bros. went down, someone or someones took their football(s) and went home. The global economy was on the verge of just curling up and dying.

    Ever since, their has been a protected class of capitalist, the holders of senior bank debt. Ireland bankrupted itself to protect them. In country after country the public fiscs have been looted to insure that this class suffers no losses. Even the European Union and the IMF have taken hits to keep these folks whole. THAT is the core financial crime that has been perpetrated.

    Globally, wealthy bankers have screwed up mightily, wrecked the world economy, seen publics footing the bills their destructive obsessions with not just wealth but outrageous wealth caused and have suffered no punishment or loss because of it. AIG went short credit default swaps against the world, but Martin Sullivan hasn’t even been pilloried in the press. The Lehman collapse stank mightily, but Dick Fuld kept his job right into Chapter 11. He still has his personal fortune and his house in Stamford, Connecticut. Why was no one brought to answer for their incompetence and venality. At the very least, the bonuses they had received over the previous 5 years should have been clawed back. Can anyone say these managers did a good job and deserved rewards for it?