Will the 2010's be the new 1930's?

[Tahuti]

This kind of thing doesn't mean much. 2nd law of thermoeconomics! There is only so much oil, so much water, only so many people can be the slaves of anonymous masters in far off lands. Only so many people can be masters of such slaves.

Absolutely true, but...

At any one time there is only one finite pie, and in relation to that, it definitely is a zero sum game. Economics, when all is said and done, is just a language for social relations.

Economies can grow indefinitely, even as resources are being used up. The prices will just simply rise as demand rises or supply shrinks (though the former is happens earlier), which's why economic growth usually correlates with - inflation and not deflation. This is good though, as it entices businesses to do more with less and continue innovating.

 

[Marla_Singer]

Even if one surmises this, there is no way that a replication of the Great Depression is as possible. 80 years of economic experience and repair is likely to mitigate against such a disaster. It is true that (economic) history often repeats itself. It's remarkable how quickly people forget the lessons of even recent history. But this assumes a level of ignorance that seems hard to believe even for human nature.

The sovereign debt crisis is of a different nature than the 1929 crisis. As such, it's not really about History repeating itself.


Yesterday night, I've discovered that nice video about the US debt crisis (and it is more or less the same issue for Europe as well). I post it here because it's very clearly-explained.


Link to video.

 

[Winner]

Correct. Though Sweden and the Netherlands would make fine examples for Europe too.

No, because Germany is a net-saver. Being a net-saver also happened to keep its Industrial sector intact, but that's unrelated to why Germany is both a net-exporter and doing so well. China is a strong industrial power and growing fast for the practically the same reason.

Now I am confused a little. The reason why Germany is a net-exporter and doing so well is... tamtadadaa... it relies heavily on the industry as the basis of its economy. That's especially good these days when the developing countries experience growing demand for the kind of things Germany produces.

By extension, Germany also creates growth in neighbouring countries.

I doubt looking at the streets of Brno has any bearings on what goes on in the United States or any other nation with rampid unemployment .

The unemployment rate in the Czech Republic is about 8% (+- 0.5%), which is nearly the same as in the US. Our labour market is less flexible than yours, so we have more long term unemployment. And still, no impoverished masses anywhere.

What I am trying to say, you (none of us, really) can't even begin to imagine what it was like to be unemployed and poor during the Great Depression. The world is much safer and richer place today, even in the times of economic stagnation.

 

[Leoreth]

What are we gonna call the 2010's BTW? What do people call the last decade?

I like "the naughts"

 

[Narz]

The sovereign debt crisis is of a different nature than the 1929 crisis. As such, it's not really about History repeating itself.

Yesterday night, I've discovered that nice video about the US debt crisis (and it is more or less the same issue for Europe as well). I post it here because it's very clearly-explained.


Link to video.

I agree Marla, this is a nicely explained video & pretty frightening in it's implications.

The inevitable result of the current situation, not properly dealt with, is the subject of a book I read recently which paints a picture of a future far more bleak than even the Great Depression (it's fiction of course but not something we can entirely rule out).

 

[Tahuti]

Now I am confused a little. The reason why Germany is a net-exporter and doing so well is... tamtadadaa... it relies heavily on the industry as the basis of its economy.

Germany's industry is intact because of the net-savings. And Germany also is doing well because of the savings/debt ratio. Germany's industrial sector isn't to credit for Germany's steady GDP growth and being a net-exporter (which is relatively irrelevant may I add, since a net-"importers" export money) but what led to the preservation of Germany's industrial sector is, namely the positive savings-debt ratio.