Great(er) Depression 2?

Regarding SS insolvency......Madcap, you are using old numbers, as is much of Washington. And they are comfortable because those old numbers gave us a lot of time. But those numbers were "fixed" in the OLD economic and financial paradigm from pre-Depression times. That was when the stock market was cruising along, conservative portfolios were earning 9%, CDs and moneymarkets could easily bring in 5-6%.....i.e., the good old days pre 2008. So much wealth has being wiped out, so many people are losing their jobs, so much tax revenue is decreasing.....that the annual SS "tax" is suddenly facing an 80% decrease....and that is and will be catastrophic to the SS fund for which the "LOCKBOX" was robbed long ago.


http://money.cnn.com/2009/07/29/news/economy/fixing_social_security.fortune/index.htm

 

See the problem is SS has never really had any kind of trust fund, ever really, surpluses in it were used to pay for other things. As with most government programs it's pay as you go, especially since until the later 90's/early 00's the idea of SS every really having a big problem was barely even an issue. But of course SS tax collections have gone down, tax collections on everything have gone down massively, and in 2 years they're be back up again massively as some new bubble begins. This isn't the first recession people, the Earth is not going to implode, in 2 years this will just be a scant memory on a chart. Brazil, France, Germany, Denmark, Portugal, Canada, and others have already left the recession and have had growth. Even with jobs being lost is slowing:

• October 2008 - 240,000 jobs lost
• November 2008 - 333,000 jobs lost
• December 2008 - 981,000 jobs lost
• January 2009 - 741,000 jobs lost
• February 2009 - 681,000 jobs lost
• March 2009 - 652,000 jobs lost
• April 2009 - 519,000 jobs lost
• May 2009 - 303,000 jobs lost
• June 2009 - 463,000 jobs lost
• July 2009 - 276,000 jobs lost
• August 2009 - 216,000 jobs lost

 

In 2 years....this will be a scant memory on a chart? C'mon Madcap......that is way over the top. With the Dow alreading losing 50% of its value from 14,000 to 7,000 and fortunes lost.....with foreclosures and bank collapses left and right....with the largest bank in America trading as low as $1 a share and not going BK only because of the federal government....only a blip on the screen? That's just total nonsense, Bro. Are you trying to defend a particular political side here? (I will blame both)


Anyhow then you went on about Brazil, France, Germany, Denmark, Portugal, Canada actually showing a little growth....and we are (ahem!) talking about a little! But just to be fair, let's pick the "powerhouse" of Europe: Germany.

Europe's number one economy reported a .3% rise (woo hoo!)
in gross domestic product (GDP) -- Germany's first quarter of growth since January 2008.

March 24, Wall Street Journal: "There's a slew of evidence that Germany is in an economic freefall: A 19% drop in industrial output, a 23% decline in exports, a 35% drop in new manufacturing orders, and on. The numbers we're seeing are just mind-boggling."

April 30, New York Times reveals a 17% year-over-year decline in Germany's exports and writes, "With 47% of its GDP generated by exports, Germany would suffer a severe contraction in its economy."

May 16, Wall Street Journal: "In the fourth-quarter 2009, Germany's GDP plunged 3.5%; its worst performance in nearly four decades."

May 17: Tens of thousands of German workers march through downtown Berlin to express their anxiety over the alarming increase in unemployment: at 7.7%.

June 29 Associated Press: Germany's GDP has now fallen by nearly 7% in the past four quarters with widespread expectations for a 5.5% to 6% contraction by the years end.

July 3 WSJ: "Germany's own recession is the deepest of any major economy in the world, apart from Japan."

September 8 speech by Germany's Chancellor Angela Merkel: "We are in the worst economic crisis that the Federal Republic of Germany has experienced in 60 years."

So the 0.3 growth of the European "economic bright spot" ain't impressing even Angela Merkel.....the political leader of the country that should be crowing the loudest! Why? Because this Depression is global. And we are looking at a decade from now to get thru it, minimum.

 

Again, you act like it's the end of the world. The DOW is back near 9,700(which really the DOW means shit). Economies are already going back to growth when a year ago people were freaking out that it'd be the great depression again. Recessions happen, and now it's ending. People freaked out when the NASDAQ collapsed at the end of the dot com boom but we all lived through that too. We'll be fully recovered in 2-3 years. Sure, lots of wealth got destroyed, but the a good deal of it was false wealth built on credit that should not have existed to begin with

 

Again, you act like it's the end of the world. The DOW is back near 9,700(which really the DOW means shit). Economies are already going back to growth when a year ago people were freaking out that it'd be the great depression again. Recessions happen, and now it's ending. People freaked out when the NASDAQ collapsed at the end of the dot com boom but we all lived through that too. We'll be fully recovered in 2-3 years. Sure, lots of wealth got destroyed, but the a good deal of it was false wealth built on credit that should not have existed to begin with

No, not the end of the world at all. In fact, if you read the original post, my proposition simply states that I do not believe that this thing is anywhere near over as all the pundits, the CNBC talking heads, the White House economists, the treasury secretary, and top independent economists are claiming. I am going to go out on a limb and stating that I am contrarian against them all and saying that I think this is a sucker's rally....that's all...no -- not the end of the world....In 10-15 years, we should recovering and we will eventually be fine if we can get back to laissez faire economic style of capitalism with small government and reasonable, low taxes. But the next 10 years will be hellish, I believe. I think that what some of these small growth rebounds you are seeing, and that you mentioned, are just that, small rebounds. No economy or stock market goes straight down. There are always bounces along the way. Anyhow, we shall see.....