When you think about a depression, you probably think about the Great Depression, no food, dust bowls, long lines of people in trench coats in the cold. Pictures from your middle school history books in U.S. history class. Luckily, that hasn’t happened since, and it seems like it will never happen again. We’ve got this economy thing down, no more worries!
Great Depressions are no longer possible
What if I told you that those old soup and bread line depressions aren’t possible anymore? The Fed appears hell bent on saving the central banks any time there’s a problem, any problem. Especially 10 years ago when there was a major problem with the way everyone was giving away the American dream in the form of sub-prime loans like they were candy? There were hardly any repercussions to those mistakes and there are hardly any now.
The 1% can only spend so much
These policies of never letting things collapse into a greater (needed) depression are the root of the problem we’re in now. These bailed out bankers and other people on the right side of the policy machine can only spend so much money on boats, expensive cars, luxury travel and hotels. The best thing the rich do for the rest of us is fund startups through VCs and pay for people like me to have a job. However after all of the expensive purchases and risky bets, most of the wealth finds its way to the stock market or bonds and gets locked up in the capital machine, where recently, capital has grown much faster than wages, or put another way, money is making money faster than you can make it at your job.
Back to the future
The U.S. economy peaked at the same time as the Delorean. The 1980’s. Let’s put aside the fact the GDP has gone up and focus instead on the growing homeless problem, the fact that goods and services like housing and healthcare have outpaced inflation every year and wages have barely increased, then it’s easy to conclude that the modern depression has already happened and it’s been dragging on years and years.