The Second Great Depression

I’m going to go out on a limb and call it. I have no idea whether or not Obama’s stimulus plan will work to get us out of things, but I have a strong suspicion that people refusing to call things like they are is only going to make things worse, not better.

We have 14 banks that have failed in the first two months of 2009-and February isn’t even over yet. For those who thought the crisis was confined to certain states, these banks failed all over the place, primarily in “breadbasket/’Heart of America’” locations.

It’s not just people who individually made bad decisions who are getting hit. It is states which are going broke.

  • Kansas suspended tax refunds for a while and have just pulled an 11th hour save to pay state employees
  • Missouri put tax refunds on hold “indefinitely”
  • California issued a 30 day delay on paying tax refunds to see if they can find more money
  • New Jersey forced all of its state employees to take two days off, unpaid, in order to make ends meet.
  • Colorado seems to be bent on doing the same to solve some of their own budget problems.
  • Hawaii is trying to cut off health insurance and other benefits to retired workers, no matter how long they worked before retirement.
  • Some states are now over 10 percent unemployment and over 10 percent foreclosures.
  • 47 states are said to be in serious budget crisis

Some of us are federal employees, and are somewhat “insulated” from this crisis. But more and more of our family members and friends are suffering layoffs, foreclosures, evictions, etc. And no, I’m not just talking my IVAW or college buddies…a lot of folks in my unit that I’ve been talking to have similar anecdotal details. People with formerly solid situations are suffering. People who had retirement options in stock are screwed.

Why do we need a housing bailout? The answer is simple. It has nothing to do with ‘why is the government taking my money and giving it to undeserving people’. It has to do with what the government has to do to prevent lawlessness and homelessness from breaking out on a wide scale. Note what happened in the last depression-homeless camps setting up all over the country. The life of the hobo may seem like a romantic one when viewed on black-and-white through Charlie Chaplin’s antics, but in real life homelessness is not romantic.

This economic crisis is serious. A few days ago, the Stars and Stripes published an article on how best to dig through people’s trash (known as ‘dumpster diving’) in order to save a few dollars. I’m going to go out on a limb and say that if this downturn isn’t stopped, we’re going to see a lot more problems with homelessness. A lot more families will be either out on the streets, or, given America’s auto-rich environment, living out of their cars. The roads will become dangerous as less people and less people bother to pay their auto insurance. As more and more people are cut out of health insurance (as some states are already doing), we’ll start seeing a lot of diseases becoming larger problems than previously when everyone had doctors. There will be an enormous downturn in college attendance: families will be less able to pay for their kids, and a lot of states are having to pull back on their loans and grants to students. I predict that at first, the college and high school dropout rates will increase, as teenagers who see their families start to have real crisis start pulling out of school to work earlier and help with family businesses, as it becomes more expensive to hire other employees. Later, you will see only those who have family businesses do so, or those who turn to crime. I predict an upsurge in gang violence and personal assaults/muggings. Why? Because they’re going to be competing with adults, real adults, who can’t get any job any other way. Adults are going to start living together simply for survival.

That’s my doom-and-gloom prophecy, and I think we need to be prepared for it. Personally, I’m going to have to take a loss myself. I already contacted my bank about pulling out my money and closing down my account, and found that they had implemented new policies prohibiting you from doing it unless it was in person. As I’m unlikely to fly back to Colorado, I’m simply going to start putting my direct deposit in my USAA account, and spend down the rest of it and simply live with a low balance until US Bank fails. Why USAA, you ask? Because I’m betting that the government will definitely help save USAA, given that only servicemembers and veterans bank there.

My recommendations? We need to cut all foreign aid immediately-and I mean yesterday. We also need to pull out of Iraq. The war there is and has always been pointless, and at the moment, it’s costing us more than we can afford. Let’s fix our own country, and our own economy, before we go worrying about the third world.

2 Responses to “The Second Great Depression”

  1. US Bank used to pull crap like that on me back here in OR. What I would do is find a buddy at Ft. Buckley or somewhere on A/D there and send them a limited Power of Attorney for the purpose of closing the account. Your Provost Marshall’s Office should be able to help you draw it up.

    USAA Federal Savings Bank is likely to be the last bank to fail. We’ll see to that.

    It wouldn’t hurt to accumulate some cash, though. A month’s pay ought to do it.

  2. Good blog! Several of our friends, my hubby and I have been warning of this very same scenario for many, many years but whenever we tried to educate others; it usually fell on deaf ears…calling us radical lunatics. Well unfortunately it is about to become reality so people better listen up and pay attention!
    As I continue to say; people our age will not really feel it as bad as our children and mostly our grandchildren. Altho God may return soon and end it all! He is ALWAYS in control!!

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