9 Signs That We May Be Living Through Another Depression
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3. We've now seen declining home prices in 59 consecutive months. In January, the Zillow Home Value Index was off by 26 percent from its 2006 peak, a drop larger than that seen during the Great Depression. Prices have continued to fall, and economist D ean Baker says that “it seems virtually certain that prices will continue to decline at least through the rest of the year.”
4.The foreclosure rate remains sky-high. With an inventory of 1.9 million properties, it would take the banks three years just to unload what they already own, according to RealtyTrac.
5. As economist Paul Krugman notes, “public debt is not our only problem— in fact, it’s not the core problem. The key problem is, instead, the overhang of private debt.”
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6. With so much private debt and bad home loans, banks are writing off 3.4 percent of their outstanding loans, exactly the same rate that occurred in 1934, at the peak of the Great Depression.
7. The Guardian reports that “overdrawn American cities could face financial collapse in 2011, defaulting on hundreds of billions of dollars of borrowings and derailing the US economic recovery.” European cities aren't faring better; Florence, Barcelona, Madrid and Venice are all in deep trouble.
That's leading to cuts, which is only making matters worse because our core problem remains a lack of consumer demand, and cuts take dollars out of people's pockets.
8. Add in high gas prices, which also cuts into consumer spending. Last week, CNN reported that Walmart's “core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried.”
It's a grim picture, but it doesn't have to be as bad as it looks today. Economist Paul Krugman called this bleak situation “a continuing tragedy,” and noted that “in a rational world bringing an end to this tragedy would be our top economic priority.” Yet “instead of a determination to do something about the ongoing suffering and economic waste,” he writes, “one sees a proliferation of excuses for inaction, garbed in the language of wisdom and responsibility.”
When historians look back on this era, they'll marvel at the degree of delusion that led lawmakers and the media to focus relentless energy on the deficit while turning a blind eye to the economic pain being felt by a majority of our citizens. Economists will write PhD theses detailing how this long, somewhat shallow Depression was nurtured by insane contractionary policies Congress enacted in the middle of a pummeling downturn.
Joshua Holland is an editor and senior writer at AlterNet. He is the author of The 15 Biggest Lies About the Economy (and Everything else the Right Doesn't Want You to Know About Taxes, Jobs and Corporate America) . Drop him an email or follow him on Twitter .