How Would America React to Another Depression?
Mike Garibaldi Frick posed an interesting question today at the Huffington Post, How Would America React to Another Depression?. Predictably the majority of responses to his article lack in rational thought, as most intend to blame Bush for his economic policy. Unfortunately I think this is where I need to begin with my response to the question, because every crisis which has befallen this country in recent years inevitably is followed by finger pointing.
If we were to wake up tomorrow morning in the midst of a new depression, Americans would turn on their televisions to see economists explaining the underlying causes for the economy. They would start by attacking the national debt, and rightfully so, because it is difficult for any country to remain economically independent when the government owes almost $9 trillion dollars with a quarter of that amount being owed to foreign governments. This would then lead to a barrage of attacks from Democrats blaming Bush and the Republican controlled Congress for cutting taxes which led to higher debt. Republicans would counter the argument reminded people that tax revenue went up after the tax cuts, and eventually one of the economists would inform the public the debt is due to uncontrolled spending, not lower tax rates.
After several weeks of finger pointing, and with the help of the mainstream media, specifically the New York Times, public consensus would inevitably agree the depression was the fault of President Bush. This is the point at which this hypothetical question becomes scary, at least to me. If we were truly in a depression, the welfare rolls would at least triple, along with Medicaid, putting a further strain on the governments budget. It is at this point where I would expect the current Democratic candidates to start speaking of higher taxes to fund new government programs designed to help those in need.
Universal Health Care would be implemented immediately (or as immediate as any government program can actually be implemented), and once again tax rates would go up, specifically corporate taxes and real estate taxes. The higher real estate taxes would force many homeowners to sell, and with very few buyers on the market prices would fall drastically. In an effort to prevent home prices from falling to dramatically the Federal Reserve Board would cut interest rates to around the 1% mark.
Slowly corporations would begin moving more of their plants to Mexico or overseas in an effort to avoid the increased taxes levied on them, leading to even more unemployment. Millions of Americans would find themselves heading South of the Border (some maybe even illegally) in an effort to reclaim the job they just lost for half what they used to be making. Those who remained in America would more and more look to the government to find a solution to the country’s economic woes.
By this point the election would have passed with Democrats winning in a landslide. The Department of Education would be expanded to now include public colleges, as many families will no longer be able to afford to send their children to private colleges. The Department of Defense would see its budget cut almost in half, with military bases being closed in many parts of the country and the land sold off. Entitlement programs would now make up around 80% of the proposed budget, which is now 60% of the GDP.
Crime would be rampant in most parts of the country, with jails overcrowding. Local law enforcement would be insufficient to curb the violence and inevitably martial law would be declared. For the next 20 years America would be a military state before a new American Revolution occurred with people looking to have their independence back.
Obviously the above situation is very unlikely to occur, and many will tell me that I am crazy for even suggesting that a depression would lead to a revolution. I do not feel it is as far fetched an idea as some would believe however. After all we are a country which was built on freedom, independence, and prosperity. As time has gone on we are slowly losing both our freedom and our independence. As the federal government grows, new regulations prevent individuals and corporations from performing certain actions, this leads to a loss of freedoms no matter how small that loss may be.
With every new entitlement program, or expansion of an existing one, people begin to rely more on the government for their well being. Much like a child who relies on his or her parents to put food on the table, this takes away from a feeling of independence.
In the midst of a depression, there obviously would not be much prosperity. This leads to resentment against the haves, from the have not’s which would eventually lead to hatred than to crime. Increased crime leads to decreased freedoms, which eventually will lead to a new revolution.
I am obviously not advocating any form of revolution, nor do I feel a depression is eminent anytime in the near future, but it is certainly something worth thinking about. What are your thoughts?
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Unfortunately, people would look to the gov’t to help them - the thought of helping themselves by saving, re-using items, re-inventing uses for items, doing without, growing gardens, sharing resources and other techniques that those folks who weathered the Great Depression did would not even cross most people’s minds.
And those of us who can and would do those things, would still be supporing everyone else.
Yes, a revolution would have to take place.
I think the series of events you laid out is fairly accurate of what will happen if everything continues on the present course. People will look to the government to provide solutions to the problems that were created by people looking to the government — My, how we have such short-term memories.
Benjamin Franklin said that to keep our form of government in check and maintain the highest levels of freedom, we ought to have a revolution every 75 years. By that logic, we are well overdue, and it seems to be easy to spot. The Second Amendment is the reset button on the Constitution, and is very important if we’re to defend our liberties and independence.