As the economy collapses around us and companies are lining up to get their grubby hands on taxpayer's dollars, it might behoove some of you to learn about what actually caused the Great Depression.
For starters, go here.
Then, go here.
Despite what your American History teachers told you in high school, the stock market crash did not cause the Great Depression. Bad economic policy caused the Great Depression.
The stock market crash was caused by rampant speculation. People could borrow money to play the market, and it "always went up." Sound familiar? The exact same thing happened in the housing market last year. People could borrow money (or tap into their house's equity) in order to "speculate" and get even richer. Anyone remember the TV show "Flip This House"? What happened when the poor sap trying to get rich quick couldn't flip the house? Financial disaster happened. And everyone who tapped into their home equity loans to buy a new car, or who stayed up listening to how you could flip houses with no money down got swept away in the financial tsunami.
The worst part of the whole thing is that we have a class of "leaders" who are bound and determined to make the same mistakes of Hoover and Roosevelt. Lesson to all the government types: Keynesian economics doesn't work, because you take money from people who are going to create real jobs and real wealth in order to give it to people who won't create anything. If the government creates a job, it only does so at the expense of a private company doing it.
I fully expect this explanation to fall on deaf ears, since too many people are vested in NOT looking after their own affairs. "Gimme my health care!" "Gimme my unemployment check!" "Gimme my overpriced home that I foolishly put 0% down on!" The list goes on.
Still, the best advice on how to handle the future remains the same: Don't have consumer debt. Have an emergency fund. Live below your means.
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