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There's a lot to what you say, but the biggest single cause of the Depression was a liquidity crisis -- not enough cash for banks to be able to make loans that they could expect to be repaid, hence a contraction of the economy and a vicious cycle. Today's parallels to *that* problem are too near for comfort, especially because we don't have any certainty that we've yet gotten to the bottom of our problems, or that the proposed bailout would be enough to stem the tide.
In addition to that, we are the biggest debtor nation on Earth, ever, and if we default on our debts -- or attempt to pay them off with inflated currency -- then the rest of the world will precede us down the toilet.
Well, since no one else has said it directly, let me. Your claim that the government intervention caused the Great Depression is wrong. Making that claim is like claiming that having too few lifeboats caused the Titanic to sink.
What name was given to the Great Plains farmlands stripped of topsoil by drought& wind?
by Answerbag Staff on June 9th, 2010
| 1 person likes this
what were american economic interest on treaty of versailles?
by Buttaci_G on January 24th, 2011
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How could Obama really believe New-Deal type spending and regulation would not make a New-Deal type prolonged depression?
by More2Be on July 10th, 2011
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If another "Great Depression" were to occur during your lifetime, how would your life change from the way it is today?
by Chicago Lady on May 11th, 2011
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If it's not ok to ask rich people for money because they create the jobs, can I ask a rich person for a job?
by Mister_Bromide on September 22nd, 2011
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You're reading Some people fear an economic downturn like the Great Depression. Do they not realize that other factors were involved in the Great Depression, such as the Smoot-Hawley Act and the drought in the midwest? Gov't intervention caused the last one :O
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I know, a lot depends on us
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But I had a thought. What if we just recapitalize the banks? I mean, seriously, why don't we just audit those banks..? FDIC could do that well within their realm of power...and plus that would put new reigns on Fannie Mae and Freddie Mac for future purposes.
by WoOZackWoO on September 30th, 2008
I think in the current environment it's too hard for anyone to get a handle on what their loan portfolios are really worth. That's part of the crisis: Professional mortgage brokers (packagers / resellers / buyers) don't have enough confidence in each others' valuations to enable them to trade portfolios with any degree of certainty -- no one wants to buy. That's especially true when the underlying real estate market is in flux and trending down. Now that the risks have been exposed, no one knows where the bottom might be. I halfway think that what is needed is to let this market fall to where people find the downside risks minimal and take the plunge (as Warren Buffett did last week with his planned $5 B buy-in to Goldman Sachs). But this entire sector of the economy is too big, the 'natural' progression down would take too long and cause too much upset elsewhere in the economy -- and there aren't anywhere near enough Warren Buffetts around.
by Cyanotic Wasp on September 30th, 2008