We will never see another depression driving down living standards to the level of the 1930s due to technology.
But a relatively similar percentage reduction? Quite likely. I would say that this depression looks quite similar to the beginning of the great depression when you consider unemployment percentages and debt as a percent of GDP.
You realize what happened after the boom of the 1920s, right? The worst depression this world has ever seen . There are many who say we are close to another.
Yes there has. The Great Depression was a deflationary spiral. Bank failures caused people to hoard currency. This hoarding led to decreased investment and economic activity. The decrease in economic activity led people to lose jobs, which caused them to hoard even more money.
In addition, the decrease in the money supply greatly increased the value of debts. You were getting paid less, but the your mortgage payment remained the same. This ended up being a crushing burden even for those who managed to keep their jobs.
No, of course not, and that's the most extreme possible way to take my comments.
But remember that what did more than anything to cure this county of the great depression was the massive Keynesian capital injection that we called WWII.
Unlikely. One reason the Great Depression was so bad because there was an environmental catastrophe (the Dust Bowl) which made agriculture very hard at a time when agriculture was still a really, really big deal. The virus does not make normal economic activity particularly hard; we are avoiding economic activity for mostly humanitarian reasons, and we can resume economic activity either when everyone gas been infected anyway (yay pandemics), or when testing and treatment is more readily available.
Another reason the Great Depression got worse than a normal depression was that the Hoover administration unwisely decided to make money and credit less available during the crash. Today's policy response is more about throwing money at people (sometimes just at the politically connected, sometimes fairly). One can and should question many specifics (the response is not super coherent) but at least it is the opposite of fiscal and monetary tightening.
Another reason the Great Depression stayed so very bad for so very long was as a consequence the FDR administration's unprecedented intervention into the economy. I don't mean Social Security, either, I mean things like the National Recovery Administration, which explicitly sought to turn the US into a planned economy, with minimum and maximum prices for everything, run by local politically-connected cartels with their own police powers.
When the NRA was declared unconstitutional, its practices were shifted into other places. A few of the more ridiculous practices led by other agencies are still around. For instance, the Supreme Court only killed the USDA's Raisin Board in 2015 when a raisin farmer objected to them seizing 89,000 tons of raisins (30% of his crop) to give away for free in school lunches. (The USDA of that time was also great at encouraging the big agribusiness factory farming and pushing out what small farmers were still able to operate.)
None of this planned-economy stuff is on the table today — not in the US, not with this administration anyway, and not with the current US senate. There's an outside shot of a fully nationalized health system if Bernie Sanders wins and Democrats take the Senate, and that's the most ambitious plan, and even if we assume the taxes to fund it were quite stultifying indeed, it's unlikely to be as harmful. No one is coming for our raisins.
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