The sub-prime credit crunch is just the beginning of an overall economic unraveling predicted for 2008-2009. Bush recently signed HR3648 which will ultimately mean that more sub-prime homeowners will walk away from their debt since people will no longer be taxed on the amount of forgiven debt. This will further the spiraling credit crunch, write-downs and glut of homes on the market.
In addition, America is now saddled with the largest debt in its history, China has grown into a challenging world power, more jobs have been shipped overseas, Iraq costs us billions (not to mention the emotional costs), economic disparity is accelerating and more fundamental warnings are released weekly. We are teetering on an economic cliff and it won't take much (inflation? increasing unemployment?) to send us down a slippery slope.
In order to turn things around, interest rates need to be lowered even further, but this would accelerate inflation. We need to balance the budget, but the IRAQ war and high oil prices are the albatrosses around our necks. Tax cuts have benefited the wealthy more than the middle class and poor; we need to rebalance. We need to become more energy independent. We need to allow non-residents a path to legal, tax paying residency.
An optimistic view is that we can still rally this divided nation through innovation, resolve and visionary leadership to overcome seemingly insurmountable obstacles. America, albeit sometimes reluctantly, has risen to the occasion to lead the world in the past.
But, in our current political and cultural environment, what would fill an economic vacuum created by another Great Depression? A Bush monarchy? Totalitarianism? A sweep of Christian fundamentalism? Would the United States become one giant New Orleans type catastrophe? Will we be willing to give up even more freedoms and competent leadership in exchange for safety and comfort? And, maybe even more importantly, would Americans elect visionary leaders that can put us back on track?
Many of us have never lived through such an economic calamity and think we are immune during these modern, prosperous times. Can Americans -- saddled with a corrupted political system and autocratic corporations -- rise to the occasion and pull us out of another Great Depression? If we can bring back the "can do," problem solving, innovative, humanistic, hard working values that used to make America strong, than maybe there would be hope. A Buddhist-like simplicity wouldn't hurt either.
After going through this type of economic fire, America could emerge truly changed with a new responsible corporate structure, honest and humanistic leadership and a cooperative world outlook. Maybe we would even change how money and greed corrupt our political, business, environmental and person domains. Instead of life serving money, have money serve life.
My Grandmother -- and many of those who lived through the crushing economic collapse of the 1930's -- say it was actually a time of community building, focus on family & friends and even happy times. There was still a sense of hope and fellowship.
There is a general malaise in America today -- we feel so disconnected. Wealth and materialism separates us and commodifies everything. A second Great Depression could be exactly the kick in the pants America needs. The humbling of America might just have the unexpected side effect of bringing us together again, necessitating a less meddlesome foreign policy and sparking the competitive spirit.
Real change comes out of white hot fire: the phoenix rising. War, genocide, loss of civil rights, etc. don't seem to be motivating factors to the populace these days. They might need to be hit harder to focus their attention: the pocketbook.
But things are very much different now than in the 1930's. Most importantly, we feed ourselves differently. There were a great many people during the depression who couldn't afford new shoes for 10 years, but they never went hungry. In fact, many of those people helped feed the displaced industrial workers.
There are not nearly enough family farms to absorb a nation of eaters. And our agricultural system is completely dependent on industrial inputs and transportation.
The other differences have been well said by other posters. But life revolves around eating; today eating revolves around liquidity. No money equals no food. And a hungry mob is an angry mob.
need a reformed economic base. You can only replace about so much economic activity with
government handouts before the whole thing eventually goes sour. All the people complaining about the environment are going to be complaining a lot more loudly if the lights go out or you can't get a pair of pants anymore because places like Pakistan won't take goods orders from the US anymore because our credit's bad....cause and effect, common sense, B.S. detectors on double-front, etc...
It is not entirely necessary that this happen, though. I reason that we are currently in flux to marginalize and with finality push to the fringe those elements of backward stupidity, meanness, selfishness, and greed: the collection of social pariahs and criminals called the Republican Party.
If Patriots do this, we can restore our nation on the path of Constitutional democracy; and avoid an economic downturn that always causes the least of us to suffer the most.
What do we expect when people won't devote more that a minute at a time to a political commercial soundbyte and continue to vote against their best interests because a candidate will embrace 'god, gays, and guns' while selling Americans out for pennies on the dollar for corporate campaign subsidies? (I got $100,000 in contributions so I will give away a billion in subsidies for the next 4 years!) American voters are largely stupid. If they made an informed vote, most 'leaders' in congress and the administration would be in jail and not in leadership positions.
What we need is not an economic wooping, as that will impact the poor and middle class and the rich will just move to their winter home in Dubai,
We need a psychological wooping.
we need to be shown what we truely are:
self-centered, greedy, oafish, insensitive thugs that truely believe that the world is OUR oyster.
then, we need to hear what the rest of the world thinks about us.
And then we can begin to turn on those in our society that promote that type of behavior for their own profit.
"Time marches on," and even if you were a "super-duper power" in your grandfather's day it's an altogether different world now. If you represent a violent and unpredictable heavily-armed threat ... that "just can't figure out what 'torture' is" ... don't expect the rest of the world community to cower at your holy altar.
Of course lets see - a Depression would be so devastating to the poor and middle class that you think they have problems now - you ain't seen nothin' yet.
But one thing I will say is that coming out of the Depression - those with the capital to invest will make the killing of the century!!!
The people that will be humbled won't be the ones who need it.