A sizable amount of information is now circulating in social circles and on the internet about some kind of market crash that is on the horizon for the United States, a market crash perhaps like we had in 1929 just before the beginning of the Great Depression. Indeed a significant number of people when questioned about the economic future of America do not voice a great deal of optimism.
While the Great Depression of the 30’s was difficult for many people, I believe it will pale in comparison to what we are going to experience. To understand why this may be the case, we must understand the difference between the American economy of the 30’s (during the great depression) as compared to the American economy of today.
For starters, the annual federal deficits of congress throughout much of the 1930’s even to the start of WW2 were negligible. Compare this to our government now, where we have been running trillion dollar deficits every year since 2009 if off budget expenditures of congress are included. During the Great Depression, the federal government still had annual budgets; today we have no budgets, just continuing resolutions with each year’s continuing resolutions spending more than the previous years.
In the 1930’s during the darkest times of the depression, the United States was still an exporting giant, exporting far more than it imported. Contrast that with today where we ran a 500 billion dollar trade deficit in 2016 alone. In the 1930’s during the depression, the United States was a manufacturing giant, producing the vast majority of what its citizens consumed. Today our industrial base has been hollowed out due to excessively high taxes and regulations, with China together with other countries manufacturing the vast majority of what we now consume on a daily basis.
During the depression in the 1930’s the total amount of citizens who were unemployed was around 25 percent. Today that figure in all likelihood is closer to 27 percent (if you factor in the 96 million who are unemployed).
During the darkest moments of the depression, the dollar was backed by gold. Today, the dollar is backed by nothing more than the faltering faith and credit of the deeply in debt United States. During the depression, the Fed was purchasing next to nothing of our treasuries as we could still sell them on the open market. Today the corrupt Fed is purchasing the vast majority of our yearly deficits and or treasuries through various fronts because in general we cannot sell enough of them on the open market to cover our yearly deficits.
During the depression, the US economy was the largest on the planet, with no other country even coming close. Today China has more or less achieved economic parity with the United States and is growing at an annual rate more than double ours.
In the 1930’s our debt relative to our GDP was around 40 percent, today it is close to 105 percent and being added to at an astronomical rate of 1 trillion per year (and we are not even in a major war).
Fundamentally, the United States is in far worse shape today than it was during the great depression. Chief among these reasons are the massive amounts of debt we now have (20 trillion) relative to our GDP together with the continuing enormous yearly deficits and unending money printing by the Fed, (and it is this money printing by the Fed that is the key issue).
In general, the great depression was a partial private sector collapse prolonged and made worse by heightened government regulation and taxes. What is most likely coming in the near future however will be some kind of currency collapse.
Therefore, the central question we need to ask is “what we can do within our local communities to prepare for what is most likely coming?” A big part of this preparation I believe, will be in learning how to greatly expand the care of the poor and less fortunate independent of state and federal funding; with local charities and churches being “front and center” in this effort. Churches in particular, will have to be willing to divert more and more of their general funds into caring for the community outside their congregations, with the great possibility of receiving little or no public recognition of the funding they provide. This practice may not build traditionally large congregations or power structures within the local church, but it will be necessary for the community as a whole. In addition, as churches increasingly come together for the sake of the communities they reside in, the identities of fellow congregants will be increasingly in the God they serve, rather than the local churches they reside in. Finally, during these coming times, pride and self-righteousness will die hard, but die they will in most cases.
I know it is not popular to talk about this, but now more than ever, Article five people, article five. [email protected]