Many keep talking about another Great Depression. In fact, books on the Great Depression are selling faster than the latest Harry Potter book. Many want to learn more about this troubled period in US history because the media commentaries keep making a comparison between the Great Depression and 2008. How realistic is this comparison? Let's look at statistics for starters!
Here are some key statistics below that show the stark contrast between the Great Depression and 2008:
GNP ($ Billion) (Size of Economy) Great Depression: 104 versus 2008: 14,408
GDP Growth Great Depression: -25% versus 2008: 0%
Unemployment Rate--High Great Depression: 25% versus 2008: 7%
Export Growth Great Depression: -66% versus 2008: 15%
Consumer Price Index Great Depression: -27% versus 2008: 4%
Government Support Great Depression: Very Little versus 2008: Significant
Global Coordination Great Depression: None versus 2008: Extensive
Source: Federal Reserve, Bureau of Labor Statistics & NBER
In 1929, during the Depression, the US was similar to today's version of an emerging market country: smaller economy, no FDIC insurance, no government safety nets, no such thing as social security or unemployment benefits. On top of that, the US government had no experience presenting remedies for a financial crisis. Because the government did not act swiftly in 1929 and then created policies that further compounded the Depression problems, the Great Depression became a much larger problem. Today, there are many more hats in the ring ready to take swift action if necessary.
A normal reaction is to allow fear to get the best of you. As I always say faith and fear are foes. They are perfect opposites. Franklin Roosevelt said it best, "All we have to fear, is fear itself". When we place our trust in God above world markets, above worldly possessions, and above our personal desires, we allow Him to take control of our situation and guide us to wise and prudent decisions. Seek Him in good and troubled times, and He will never leave your side!
Here are some key statistics below that show the stark contrast between the Great Depression and 2008:
GNP ($ Billion) (Size of Economy) Great Depression: 104 versus 2008: 14,408
GDP Growth Great Depression: -25% versus 2008: 0%
Unemployment Rate--High Great Depression: 25% versus 2008: 7%
Export Growth Great Depression: -66% versus 2008: 15%
Consumer Price Index Great Depression: -27% versus 2008: 4%
Government Support Great Depression: Very Little versus 2008: Significant
Global Coordination Great Depression: None versus 2008: Extensive
Source: Federal Reserve, Bureau of Labor Statistics & NBER
In 1929, during the Depression, the US was similar to today's version of an emerging market country: smaller economy, no FDIC insurance, no government safety nets, no such thing as social security or unemployment benefits. On top of that, the US government had no experience presenting remedies for a financial crisis. Because the government did not act swiftly in 1929 and then created policies that further compounded the Depression problems, the Great Depression became a much larger problem. Today, there are many more hats in the ring ready to take swift action if necessary.
A normal reaction is to allow fear to get the best of you. As I always say faith and fear are foes. They are perfect opposites. Franklin Roosevelt said it best, "All we have to fear, is fear itself". When we place our trust in God above world markets, above worldly possessions, and above our personal desires, we allow Him to take control of our situation and guide us to wise and prudent decisions. Seek Him in good and troubled times, and He will never leave your side!
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