Letters to the Editor

The Great Depression: The sequel Is it coming to a soup kitchen near you? Here's how we'll know if the current recession is turning into something much worse. By Andrew Leonard [2008-04-02]

• The Anti-Depression mantra

  There is one thing working in our favor, that is decoupling. Global economies decouple from each other at critical points, providing strength to the weak economies. Japan in the 90's did not collapse socially, and neither did Argentina.

  The decoupling argument loses support when you remove the strongest economy in the system. Decoupling was also more effective when the world economies were less interdependent. The first Great Depression was economic failure on a global level. You can make the point that the worlds economies should have been LESS susceptible, and more likey to decouple in the 30's.

  The majority of taxes are sales taxes, which impact the poor directly. Any failure of the consumer will be a failure of mostly state and local economies, which will spill over into Federal revenues. At some point in recent history the amount of revenues collected for SSN and Medicare eclipsed payroll taxes. I am pretty sure the government collects more money on behalf of these programs than they collect in taxes. That money then becomes a source of operating income, as the FEDs routinely raid those funds to run the government. The rest of spending is deficit spending. The answer to who is paying the most in taxes is moot, no one is, unless we count the long term obligations that accimpany deficit spending.

  The problem with unfunded liabilities is that they are achieved at the expense of future growth. We are selling the next round of good economic times, for a hamburger today.

  Wall Street believes that the overall global economic picture includes a middle class China and India, raising demand and boosting the global economy. These are the people who routinely sell us on capitalism in Russia, and who wonder, as the Dalai Lama does, what the world will look like if everyone has a car? General Motors treats that question as dogma.

  Of course it won't work, if we all want to breathe and eat.

  They also ignore the fact that highly inflationary economies (CHina and India) are at risk for systemic collapse, as in Weimar Germany.

  But as one economic pundit said, it may not be a Depression, it will be 'A Long Gray Day for the Rest of Your Life', referring to Groundhog Day the movie.

  -- aveutter
  [Read aveutter's other letters]
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