The Great Depression Part 2? - Page 4

[tayndrewsmama]

Originally Posted by Violet2

SS is meaningless for all but the boomers and up. Younger than the boomers and there is not enough money for you. We get our SS statements every year 'by the time you retire, unless something changes, there will be no funds available for you.'

V

Noooooo, you're joking right? Dh's don't say that.....yet.

[Violet2]

Originally Posted by tayndrewsmama

Noooooo, you're joking right? Dh's don't say that.....yet.

I'm serious. Are you reading the whole thing?

Anyway, it's a pretty widely known fact. There aren't enough people paying into the system any more.

SS is not going to be able to sustain us unless Congress does something.

And they're kind of busy right now.

[SeekingJoy]

Our's say that (paraphrased) too. Not joking.

[Denvergirlie]

Originally Posted by tayndrewsmama

Noooooo, you're joking right? Dh's don't say that.....yet.

I got my statement just a few weeks ago, what mine says is:

You have earned enough credits to quailify for benefits. At your current earnings rate, if you stop working at 62 your payment would be ... if you stop working at 67, your payment would be ... if you stop woprking at 70 your payment would be...

Down below it does however state this:

***Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefit amount may change because by, 2041 (I myself will be 68 in 2041), the payroll taxes collected will be enough to pay only about 78 percent of scheduled benefits.

Expect changes to the law as well as reduced benefits, either that or pray for a big baby boom to occur right now so those kids will be working we/ I retire.

[newbymom05]

Originally Posted by krankedyann

FDR's policies actually lengthened the Depression and made it worse. Obama's looking to gear up for the same thing. Even JFK said the way to stimulate the economy was to cut taxes, not raise them. Raising taxes in an economic downturn is a decidedly recent idea. Now we have states going bankrupt in the middle of it all, too, because they have no clue how to manage money and cut back spending when tax revenues fall. So instead they just up taxes, making for more burden on the people, resulting in even more lost jobs..... it's a viscious cycle.

Seriously???? Because we've had lower taxes for the last 8 years, you know.

And while Rush Limbaugh may think FDR's policies actually lengthened the Depression and made it worse , many economists, including the previously mentioned Paul Krugman, disagree. If anything, they argue that FDR should have fought the Republicans in Congress harder and been more ambitious in his spending.

[tayndrewsmama]

Well sheesh. Didn't catch that part.

[Denvergirlie]

Originally Posted by newbymom05

Seriously???? Because we've had lower taxes for the last 8 years, you know.

And while Rush Limbaugh may think FDR's policies actually lengthened the Depression and made it worse , many economists, including the previously mentioned Paul Krugman, disagree. If anything, they argue that FDR should have fought the Republicans in Congress harder and been more ambitious in his spending.

And there are just as many economists that believe FDR's new Deal did prolong the recession.

Rush!?!?
Ha, ha, ha, not everyone who believes that FDR made the depression worse actually listen to Rush... I think he's a giant windbag personally.

[slsurface]

This may be a little OT, but I'm really surprised at the shots people are taking at FDR's New Deal economics. How did the New Deal fail? What proof do you have, and I'm not talking about some author's feelings about it...where are the numbers? I'd really like to know more. Because from my perspective, the New Deal did create jobs, it did feed families, and it established the safety net (SS, farming subsidies, medicaid/care, etc.) that so many now rely on. The only problem that I see with the New Deal is that the safety net wasn't cast far enough or planned well enough to remain sustainable over the long-term. For example, our leaders, since FDR, did not understand how population dynamics (eg. Boomers) would lead to short-falls in SS.

Also, another major difference between now and the 1930s is that our government is already in a weakened economic state because of the Iraq war. It boggles my mind to think about how much different things could be right now (and the outlook for the future) if we hadn't squandered so many resources and lives in Iraq.

[gurumama]

Originally Posted by Denvergirlie

And there are just as many economists that believe FDR's new Deal did prolong the recession.

Please link to a peer-reviewed study that shows that 50% of professional economists state this.

[lolar2]

There was a UCLA study recently asserting that FDR screwed up in various ways. I haven't even looked at it, myself, let alone scrutinized it for quality, so I can have no opinion on it, but I heard it exists. You can take a look at it if you can find it, I guess.

I believe the "more of us would be screwed now" was referring to people currently collecting SS retirement or disability and their families who would have had to stretch to help support them.

[Denvergirlie]

Originally Posted by gurumama

Please link to a peer-reviewed study that shows that 50% of professional economists state this.

Sorry, I don't know much about peer reviewed studies but here are just a handful of folks that agree FDR prolonged the depression.

Milton Friedman, Nobel Laureate, Hoover Institution
James M. Buchanan, Nobel Laureate, George Mason University
David Landes, Professor of History Emeritus, Harvard University
David R. Henderson, editor of The Fortune Encyclopedia of Economics and author of The Joy of Freedom
Harold L. Cole economic professor at the University of Pennsylvania
Lee E. Ohanian economic professor at UCLA
Tom Cooley, Dean of the NYU Stern School of Business
Valerie Ramey, professor of economics at University of California
Price Fishback, an economic historian at the University of Arizona
Economist Robert Higgs
Jim Powell, senior fellow at the Cato Institute
Thomas J. DiLorenzo professor of economics at Loyola College
Henry Hazlitt and John T. Flynn Austrian Economists
David M. Kennedy political historian at Stanford University
Lester V. Chandler economic historian
Economists Richard K. Vedder and Lowell E. Gallaway
Economists Thomas E. Hall and J. David Ferguson
Historian Michael A. Bernstein
Economic historian Ellis W. Hawley


I have real issues with some of these top “economists” that are supposedly drooling over this new stimulus package. Are they not the same economists that never saw the housing bubble and credit crunch? Allan Greenspan, the savior and chief of the economy for the past decade plus is now saying he never saw the housing bubble and today is now calling for nationalizing some of the banking industry. Why are “we” still listening to these people!?!


Even John Maynard Keynes recognized that FDR's priorities were subverting the prospects for ending high unemployment.
He wrote FDR a letter which was published in the December 31, 1933, issue of the New York Times.
Keynes warned that “even wise and necessary Reform may, in some respects, impede and complicate Recovery. For it will upset the confidence of the business world and weaken their existing motives to action. . . . I am not clear, looking back over the last nine months, that the order of urgency between measures of Recovery and measures of Reform has been duly observed, or that the latter has not sometimes been mistaken for the former".

However FDR's goal was reform, not recovery.


As for the New Deal itself..... Here's a good but also very simplistic summary that was originally published by George Mason University’s History News Network

As few snips below from that article, but in no way a complete picture.

New Deal programs were financed by tripling federal taxes from $1.6 billion in 1933 to $5.3 billion in 1940. Excise taxes, personal income taxes, inheritance taxes, corporate income taxes, holding company taxes and so-called "excess profits" taxes all went up.

The most important source of New Deal revenue were excise taxes levied on alcoholic beverages, cigarettes, matches, candy, chewing gum, margarine, fruit juice, soft drinks, cars, tires (including tires on wheelchairs), telephone calls, movie tickets, playing cards, electricity, radios -- these and many other everyday things were subject to New Deal excise taxes, which meant that the New Deal was substantially financed by the middle class and poor people.

New Deal taxes were major job destroyers during the 1930s, prolonging unemployment that averaged 17%. Higher business taxes meant that employers had less money for growth and jobs. Social Security excise taxes on payrolls made it more expensive for employers to hire people, which discouraged hiring.

Other New Deal programs destroyed jobs, too. For example, the National Industrial Recovery Act (1933) cut back production and forced wages above market levels, making it more expensive for employers to hire people - blacks alone were estimated to have lost some 500,000 jobs because of the National Industrial Recovery Act. The Agricultural Adjustment Act (1933) cut back farm production and devastated black tenant farmers who needed work. The National Labor Relations Act (1935) gave unions monopoly bargaining power in workplaces and led to violent strikes and compulsory unionization of mass production industries. Unions secured above-market wages, triggering big layoffs and helping to usher in the depression of 1938.

What about the good supposedly done by New Deal spending programs? These didn't increase the number of jobs in the economy, because the money spent on New Deal projects came from taxpayers who consequently had less money to spend on food, coats, cars, books and other things that would have stimulated the economy. This is a classic case of the seen versus the unseen -- we can see the jobs created by New Deal spending, but we cannot see jobs destroyed by New Deal taxing.

Americans needed bargains, but FDR hammered consumers -- and millions had little money. His National Industrial Recovery Act forced consumers to pay above-market prices for goods and services, and the Agricultural Adjustment Act forced Americans to pay more for food. Moreover, FDR banned discounting by signing the Anti-Chain Store Act (1936) and the Retail Price Maintenance Act (1937).

Poor people suffered from other high-minded New Deal policies like the Tennessee Valley Authority monopoly. Its dams flooded an estimated 750,000 acres, an area about the size of Rhode Island, and TVA agents dispossessed thousands of people. Poor black sharecroppers, who didn't own property, got no compensation.

FDR might not have intended to harm millions of poor people, but that's what happened.

We should evaluate government policies according to their actual consequences, not their good intentions.

[Denvergirlie]

Originally Posted by lolar2

There was a UCLA study recently asserting that FDR screwed up in various ways. I haven't even looked at it, myself, let alone scrutinized it for quality, so I can have no opinion on it, but I heard it exists. You can take a look at it if you can find it, I guess.

I believe the "more of us would be screwed now" was referring to people currently collecting SS retirement or disability and their families who would have had to stretch to help support them.

I haven't read it either, but here is the press release and a recap from UCLA
http://newsroom.ucla.edu/portal/ucla...sion-5409.aspx

[MCsMom]

Originally Posted by slsurface

It boggles my mind to think about how much different things could be right now (and the outlook for the future) if we hadn't squandered so many resources and lives in Iraq.

I think about this very often as well

[annethcz]

Originally Posted by Denvergirlie

I haven't read it either, but here is the press release and a recap from UCLA
http://newsroom.ucla.edu/portal/ucla...sion-5409.aspx

It appears that this article was first published in 2004.

From the article:

"Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chair of UCLA's Department of Economics. "We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies."

Reading this quote just made me want to and at the same time.

[smeisnotapirate]

Originally Posted by beanma

We may be waiting months for unemployment checks, but you don't see lines for the soup kitchen stretching for blocks.

People are definitely hurting and starting to hurt and worried about hurting, but the unemployment rate during the Great Depression was something like 25%-30% and we're nowhere near that right now.

*raises hand*

I have antecdotal evidence, but more and more is piling up every day.

The homeless population in Lancaster (PA) has TRIPLED. Our overflow shelters are overflowing. The food banks have been empty since the beginning of January, and are relying week-to-week on donations (which are dwindling). Our main soup kitchen last night (last time I drove by it) had a line that circled the block. Lots of kids and parents.

We're nearing a 10% unemployment rate in our synagogue. We are (demographically, as a synagogue) upper middle class workers - lots of stereotypical Jewish jobs () - doctors, lawyers, accountants. The congregation is struggling not to go into the red. We're seriously cutting back, as a group. Membership (which = dues) is stagnant, but attendance to services is up. We have (for the first time in over 100 years) FOUR members who are currently homeless. Right now, they're house-jumping in the congregation and doing odd jobs until someone can rent them a room (might be us if we buy the farm we're looking at .

Things are pretty dire already, people. I don't think this is a second GD. The world has changed, and as individuals we're in more trouble. Credit, overhousing ourselves - we're paying more as individuals. Not sure about how the economy will respond because there's that factor.

[velochic]

Originally Posted by beanma

People are definitely hurting and starting to hurt and worried about hurting, but the unemployment rate during the Great Depression was something like 25%-30% and we're nowhere near that right now.

At the beginning of the Great Depression, the unemployment rate was 3.2%. It took until 1933 (about 4 years) to reach 25%. It was also calculated differently back then. If we calculated it the same way, the REAL unemployment rate would be closer to 15% right now. I don't have a link for it, but if you google it, there are articles that mention this. But the point is that it took a few years for the rate to get that high, then it fell back down after 1933 to about 15%. That rate of 25% unemployment was for just a short period of the Great Depression... for most of it, the rate hovered between 10% and 20%. We're getting there.

[beanma]

Originally Posted by Violet2

You must realize we are just starting GD v.2.0. In 1-2 years we'll look quite a bit like the GD. And structurally and in many ways, statistically this is very much like the beginning of the last GD.

V

Ah, see, that's where I beg to differ. I think that we could spiral into another Great Depression if appropriate action weren't taken, but I believe that appropriate actions will and are being taken and we will stave off another Great Depression. I think it will get bad, but not that bad. Maybe I'm an optimist or just a realist!

Here are Great Depression stats: http://www.bls.gov/opub/cwc/cm20030124ar03p1.htm

[SeekingJoy]

Originally Posted by velochic

At the beginning of the Great Depression, the unemployment rate was 3.2%. It took until 1933 (about 4 years) to reach 25%. It was also calculated differently back then. If we calculated it the same way, the REAL unemployment rate would be closer to 15% right now. I don't have a link for it, but if you google it, there are articles that mention this. But the point is that it took a few years for the rate to get that high, then it fell back down after 1933 to about 15%. That rate of 25% unemployment was for just a short period of the Great Depression... for most of it, the rate hovered between 10% and 20%. We're getting there.

www.shadowstats.com

[beanma]

Originally Posted by smeisnotapirate

*raises hand*

I have antecdotal evidence, but more and more is piling up every day.

The homeless population in Lancaster (PA) has TRIPLED.

sme, that sounds pretty awful in your area, so sorry. I don't think it's like that everywhere, though. And actually from what I can read some areas of PA have unemployment rates of less than 5%, but some areas are up around 10%. It seems to vary pretty widely across your state and across the country.

[p1gg1e]

Originally Posted by smeisnotapirate

*raises hand*

I have antecdotal evidence, but more and more is piling up every day.

The homeless population in Lancaster (PA) has TRIPLED. Our overflow shelters are overflowing. The food banks have been empty since the beginning of January, and are relying week-to-week on donations (which are dwindling). Our main soup kitchen last night (last time I drove by it) had a line that circled the block. Lots of kids and parents.

Our food banks are flooded also when they are open.