The Coming Depression

by Sal on May 13, 2010

in Economy,History,Politics

Longtime readers of Axis of Right know that I’ve contended for a while that the worst of the economic crisis of 2008-2009 is ahead of us, not behind us.  The massive amount of money infused into our economic system over the last two years, the coming insolvency of entitlements such as Medicare and Social Security (not to mention ObamaCare), along with the fact that we haven’t even gotten rid of the troubled assets that were supposed to be dealt with by TARP foreshadows a collapse of epic proportions.

Robert Samuelson has written a piece that expands on the idea that we are heading to a second great depression, or as he calls it, Depression 2.0.  He points to the situation in Greece as an indicator of what is to come, and draws parallels between the economic situation leading up to the Great Depression and those of the current day.  Sure, we could end up with a period of relative recovery between now and the great collapse, but if we do not change course, that collapse is inevitable.  Even if a resurgent GOP is able to peel back government and cut spending, it may not be enough.  We are so interlinked with the rest of the world that their problems will become our problems.  If Europe, for example, ends up collapsing under its own heavy nanny-state burdens, then the market for America’s goods and services will decrease.

In the end, we need to first get our own house in order, and then also work to find a solution to the world economic order.  As has been the case for two World Wars and the Cold War, America has to lead.  This time, the war is against government bloat and crushing debt.  America needs to lead the world through the coming economic crisis and back to free-market capitalism.  Unfortunately, the current occupant of the White House has not shown any ability to lead, making the situation all the more dire.

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Budos World » Blog Archive » Sad, Silly and Just plain dumb
May 15, 2010 at 7:08 am

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Ryan May 13, 2010 at 5:46 pm

I think the great wall we’re going to hit won’t be this year. I think that by the end of the year the economy may have grown.

However, January 1, 2011, the Bush tax cuts expire on the only people that truly matter in regards to tax policy — the wealthy. Also, the first Baby Boomers turn 65 and the deluge into SS begins. If you were a business or a wealthy investor it would make NO sense to do unnecessary business next year. Do what you can while the tax rates are low in 2010, then bite the bullet. This is the opposite of what Art Laffer believed caused the 1981-2 recession — phasing in the massive Reagan tax cuts froze many businesses until the tax cuts were fully implemented.

So, I can’t agree with the article that 2010 will be a remarkably dour year. The real fiscal threats materialize next year. Unfortunately, the problem with solving this problem is that it is systemic. Even the late-great Ronald Reagan with his enormous electoral power was not able to rein-in the size of government too much, and subsequently it grew once again under Clinton and the Bushes.


stress symptome June 5, 2014 at 8:34 am

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