Monday, February 23, 2009

RECESSION OR DEPRESSION, A MATTER OF OPINION!

My parents went through the Great Depression and so did my older sister. I can remember my mother telling me stories about how my father could not get work. My sister was born in 1932 and was a baby during this time. It was a terrible time for families and people that survived never forgot the hardship.

My mother saved everything she ever came in contact with from then on and my sister is almost as bad!

The Great Depression was the worst economic slump ever in U.S. history. The cause is still a matter of debate today. Some believe the collapse of the stock market in October 1929 played a major role. Two months later, stockholders had lost more than $40 billion dollars. Some of the nation's largest banks were failing to maintain adequate reserves and were investing heavily in the stock market or making risky loans. Bank deposits were uninsured and when the banks failed, people lost their savings.
People from all classes stopped buying. This caused less items to be produced which led to a reduction in the workforce and less jobs. Millions of Americans were jobless, homeless, and penniless. The number of commercial banks failing between 1929 and 1933 was 10,763.

America had lent large amounts of money to Europe and UK, to help rebuild after the first world war. Therefore, the U.S. economy spread to the rest of the world as America called in loans.

Some say the end of the Great Depression came in December 1941 when America became involved in World War II and nations increased their productions of war materials. This provided jobs and put money back into circulation. The government under Franklin Roosevelt took over the responsibility for the elderly with the creation of Social Security. Unemployment compensation was created for those involuntarily unemployed. The Federal Deposit Insurance Corporation (FDIC) helped to restore confidence in banks. Several other bills provided mortgage relief for homeowners. This changed the relationship between the government and the people as they came to expect and accept a larger federal role in their lives and the economy.

The more I read about the Great Depression the more our situation seems to coincide with the events of that time in our history. The 1920s "boom" and then the stock market crash.
President Herbert Hoover supposedly did nothing about the Depression. George W. Bush did nothing to prepare the American people for what we are going through today.

The definition of recession is: a period of reduced economic activity. The definition of depression is: a severe economic downturn that lasts several years.

What do you think about the situation the American people are facing? Are we in a recession or a depression? Do you think things are going to get worse before they get better? What are your thoughts about the bailout?

On a lighter note, two famous songs during the Depression: Brother, Can You Spare Me A Dime and Mr. President Have Pity On The Working Man.

22 comments:

Tabitha in Bliss said...

I'm praying it is only a recession, but we could very well be smack dab in the beginning of a depression if this stimulus plan does not work for EVERYONE.

Margaret Cloud said...

I hope things change around but it does seem to becoming worse. Our state of Michigan has the highest unemployment rate and factories are moving out right and left. Our country better get back to God and pray for miracles to start happening, I do believe in miracles.

Charles Lister said...

I hope it's only an economic recession but I'm afraid it's far worse than that. The last thirty years of policies were designed to make the rich richer while impoverishing the working class and it's left very little for people to fall back on. Over the course of the last 15 years we have systematically shipped jobs and factories overseas leaving us devoid of a manufacturing base. We are left as a nation who's economy is all but completely based on consumption with little or no production. I don't think you have to have a PHD in economics to see that that was never a sustainable way to organize a nation's economy. It was fun for a small group of people while it lasted, but I think now even their joyride is over and there is nothing left but to face the music.

Jamie Dawn said...

Recession, not a depression... yet.
I think the huge spending bill was the wrong thing to do, so I believe we will be headed for harder times over the next year or longer. Hopefully, our economy can begin to recover, but the government needs to back off and let business thrive. Raising taxes will deter growth, and big spending forced government to raise taxes. There was economic growth through the majority of Bush's presidency, then we took a downturn. I was angry with him for signing the bailout/rescue bill and at McCain and Obama for voting for it. There was a rush to SAVE our economy which did not help us after all. It seems now that every day we hear what a CRISIS we're in and how we have to ACT NOW to SAVE our economy. Bush was criticized for using scare tactics concerning terrorism, and now Obama is using scare tactics concerning the economy.
Keep taxes low and let businesses with good leadership and management thrive. Let those with corrupt or bad leadership fail.
We are no where near The Great Depression. It doesn't mean we can't end up there, but for now we are not there at all. Overspending and raising of taxes may very well drive us into a depression.

Sylvia K said...

I think a lot of people have their head in a place that prevents them from seeing the reality. Recession it may still be, but unless major changes happen, a depression it will be and to act as though the republicans had nothing to do with it is totally unreal. As is blaming the current administration!

Margie's Musings said...

This is an economy on the very brink of depression.

Roosevelt was unable to end the last depression no matter what he did but WPA and CCC did provide jobs for men and kept their families from starving.

Clara....in TN said...

Recession right now....but if things do not change....a depression. The head-line in our local paper for the last two days have been about people that cannot pay their electric bill. One couple lived in a trailer (mobile home) and their elecric bill was 489.00. They said that was more than their trailer payment. It's something to think about!

Beth said...

I think we're currently in recession that could easily become a depression. I'm glad that Charles Lister mentioned our jobs and factories being shipped overseas because I do think that is also a big factor in our current situation. I know President Obama has his hands full right now, but I do hope that he will address this issue at some point because it is still happening. Our factories are closing left and right around here, and at least two of them were closing because they were being moved to Mexico.

Thanks for a timely and interesting post, Judy.

Jeannie said...

I remember my stepdad's stories about growing up during the Depression in Michigan, begging for food along with the other neighborhood children. I don't think our country is quite there yet, but I can see it happening quite easily. And unfortunately, I think this year is going to be even tougher than the last one.

P.S. My thought on the bailout is that enough is enough. We simply don't have any more money to loan.

grammyof13 said...

When we were in Oklahoma back in November, we asked an elderly lady who is an Aunt to my son-in-law, about what the difference was. She said flatly, "There ain't no difference. It is all in what you want to call it!" I didn't come away feeling educated for sure. So to have a discussion on this subject is a great idea. Thanks for a great post.

anewwayoflife08 said...

Here in the UK it's much the same, everyday on the news more people are losing their jobs and homes, and workplaces are closing down, and I feel this is only the tip. There is and will be worse to come

Rachel said...

My parents went through the depression. They saved everything as a result! Waste not, want not!

A recession for sure and a depression if we aren't careful. It's sad that we are in such a mess. Sending our jobs to other countries was not wise.

As for the bailout, I think it's scary and how will we ever get out of debt? I don't agree with all this bailout stuff.

I read your previous post with interest too! I always wonder about those buffets and think of all the people that might have had their fingers in there and sneezing, coughing, etc. Makes you think about going to those places! I don't like people eating off my plate. If they want food let them get their own! No double dipping either please!!

Good stuff Judy!!!

WELCOME TO MY WORLD OF POETRY: said...

Things must have been bad in those days you write of. I sincerely hope the present crisis don't get that bad. It was an education to read what life your side of the ocean in those days.Thank you for enlightening us.

Take care Judy.

Yvonne

SILVER said...

times are truly hard for many people, Judy.

I do pray that we will all still keep our faith in trusting and believing in our Great GOD, our Provider for all our needs no matter what the times we are in.

Love,

Silver

Lilly's Life said...

Great post Judy. I think we should all learn a bit more about the Depression because all the signs are that while it may still be in a recession it will get worse. When you hear of companies closing down after trading for decades then it gets a little more scary.

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Grannyann said...

My mom and grandmother were savers and someone told me that the depression was why. I need to do a blog on my mom, the saver.

Sweetie said...

My parents grew up in the depression also. When I would tell my mother to buy something that she considered a non-necessity, she would tell me that I didn't know what it was like to grow up during the depression. She remembered her father walking along the railroad tracks picking up coal and putting it in a bucket. In our area I think that we are on the verge of a depression. Our largest employers are drastically reducing staff and having the work done overseas. My daughter was just informed yesterday that she won't have a job after April.
Sweetie

Anil P said...

I think things should get better. Better still I hope it will improve a lot of things, especially the things that contributed to this or were responsible in some way to this happening.

The Muse said...

Either way...whichever it is...or turns out to be...I hope we can all continue to lift up one another emotionally and spiritually...and grasp the reality..that being frugal is not a bad thing :)

Nancy said...

I think it's a recession and that things aren't nearly as bad as they were during the depression, at least according to my dad. Today's generations don't have anything to reference to, and so they think things are as bad as they can get. They are used to eating out several nights a week and buying lots of stuff on credit, often living WAY above their means. This may be a wake-up call to us to start living more frugally, like our parents did.

That is not to say that times aren't hard for many today, but I think all the news media and the politicians shouting doom and gloom make things seem worse than they are and could get. Let's pray that things even out and then begin to improve..

June Saville said...

Australia is not yet in a recession - technically - but seven of our biggest trading partners are, so you'd think it a matter of time ...
I was born in 1936 - just after the end of the Depression here. My Dad had to go on the road looking for jobs in the country, and shot rabbits and sold them to get money. These travellers were forced to move from town to town in order to get what they then called 'sustenance'. He had been a qualified trademan before the Depression hit.
There is no doubt that the experience affected him and my Mother for the rest of their lives.
In a way, I learned by this - and I have always saved what I could.
June in Oz

Amber Star said...

I, too am a child of depression kids and they saved everything. Didn't have much, but they hung onto what they did have until it was so worn out it should have gone to the trash years earlier. They are stunned I give old clothes and things I no longer need or want to Goodwill.

I think it will get worse and it will be a full blown Depression before it gets better. My dad worked in CCC camps when he was a teenager and I truly think my grandparents sent him there to keep him from starving. It was very hard back then. He also helped build our Will Roger's Coliseum, where we have rodeos, and many other events, including some high brow equestrian shows.

I'm sad to see our stocks and things my husband has worked for all his life lose so much money, but as long as we have each other we will be ok. My garden may get a bit bigger and I can keep chickens in the city if it comes to that.

My tomato seeds have germinated and are growing in the greenhouse along with the basil. I took some pics today, but didn't get them uploaded to my computer yet. My garden is small but it really doesn't take much to provide a lot of food. Maybe I'll write a how to save money by taking care of yourself post soon.