Will there ever be a new Great Depression (and when)?

[LAKISYLVANIA]

Discuss.

I don't know. I'm not an expert in economics, but i'm interested to read other people's opinions about it.

[136or142]

Don't know when but as long as conservatives continue to implement many of the same policies that led to the Great Depression (and the Great Recession):  deregulation of financial markets, tax policies that lead to large income and wealth inequality, of course there will be more depressions that could lead to a Great Depression.

What prevented the Great Recession from becoming much worse was the intervention of the Federal Reserve in providing liquidity in the banking sector (the TARP and the stimulus also helped.)  However, a majority of Republicans in Congress initially opposed the TARP.  Imagine if you had a Republican President and a majority Republican Congress at the time who agreed with the idea that 'the market should be left alone to solve recessions' so they did nothing to address the Great Recession.

There certainly were other factors that contributed to the length of the Great Depression that fortunately no longer exist today such as the U.S being on the Gold Standard, but as the Great Recession showed, bad policies and a lack of regulations (or a lack of enforcement of regulations) can certainly still lead to a Great Depression if not addressed.

[pbrower2a]

FSDIC. FDR established an insurance system for protecting bank deposits so that people would not find that the payroll, loan fund, or other deposits were gone due to a bank run. In 1931, Herbert Hoover failed to back the banks, and the bank runs destroyed much of the banking system. In 2009, Obama backed the banks, and America did not undergo the bank runs that it had endured in the dreadful last half of 1931 and throughout 1932. That made all the difference,

 

The peaks of 1929 and 2007 were the levels from which the economy went into the tank. The meltdowns beginning in those two years after from a year to a year and a half were very similar. After a year and a half, things kept going down from the awful levels of 1931 but started to recover in 2009.

Say what you want about the flawed nature of the 2009-present recovery (that it has gone first into enriching elites while real wages have deteriorated), such is all that was possible from 2011. That is all that the Hard Right would allow, and it would blame Obama for not cutting taxes even more, selling off public assets at fire-sale prices, and eviscerating unions.

But notice something else: Obama could not sponsor a speculative boom (for which America was unwilling anyway). The severest recessions, let alone depressions, usually begin with the implosion of financial bubbles. I don't know what bubble there is -- so what we could get now could be something not quite a severe recession. Tariffs and a trade war will more likely bring stagflation, a very different critter.

High securities prices also  depend upon near-zero interest rates. When interest rates are likely to remain around 1%, a 'dividend stock' (let us say a public utility that has practically no growth potential) that pays $1 a year is worth $100 a share. When the interest rate is 4%, the same 'dividend stock' is worth $25.