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The “what if” game is certainly more fun to play if you think you could survive a shock to the global system. What would happen during an asteroid strike or a zombie apocalypse? While those scenarios are highly unlikely, something that isn’t unlike is a second Great Depression.
Life has changed so much over the past century that imagining what a 21st century Great Depression might look like is challenging. Here are some reasonable predictions.
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We spend a lot of time imagining disaster scenarios, but one of the first things to happen in an economic crisis–like the one in 2008–is mass-layoffs, resulting in mass-unemployment.
This is one of the main features of a depression—because when people are unemployed, money is scarce, and the entire economy retracts sharply. Without wages, the economy comes to a screeching halt.
If you recall, farmers suffered the most during the Great Depression. First, several years of strong production drove expansion even as the price of grain plummeted. Next, the “Dust Bowl” drought decimated crops through unprecedented erosion, leaving an entire generation of farmers destitute.
The stakes are different now, and what would break farmers today would be the lack of a market for their products. Meat and dairy farmers would be particularly hard-hit.
In the event of a significant tax shortfall, government layoffs typically happen—this is the event that puts the rest of us in danger. With the local and federal governments running on a skeleton crew, firefighters, police, and power plant workers will be stretched thin.
Devaluation of Currency
Imagine what would happen if your life savings lost most of its value overnight. This can happen when there is hyperinflation—one of the worst things that can happen after a shock to an economy. There isn’t much you can do in a scenario where your cash loses all its value.
The most recent example of this is in Venezuela, where the currency has lost 99.9% of its value in recent years. This can happen when there is a shortfall in tax revenue, leading a government to print money in order to fill the hole.
Unfortunately, it’s a little like patching a hole in cloth by using fabric from around the hole: eventually, the exchange rate is blown out of the water and paper currency is rendered nearly worthless.
Economic policy leading to hyperinflation is unlikely unless leaders are poorly informed and act irrationally–which doesn’t feel like a stretch at the moment.
In most doomsday scenarios, we imagine people violent and looting, but the historical record does not support this notion. Initially, there will be enough food to go around, thanks to well-stocked grocery stores full of non-perishable goods. However, that won’t last long, and people in cities will line up for food provided by the government.
Remember that in the original Great Depression, the majority of people were fairly self-reliant. These days, most people know little about how to produce their own food. Those of us with homesteads will be in a good position to produce our own food, but in the city, it will be another story altogether.
The reality of hyperinflation is that even if there is food available, it will be too expensive for most to afford.
The electricity shortages we see in Venezuela are mostly caused by mismanagement. Fuel shortages, sabotage, and engineers fleeing the country for more stable conditions have led to the blackouts we’ve seen in the South American crisis. A 21st-century depression would not likely see nationwide blackouts of that scale in North America.
However, the American power grid is vulnerable due to its age and ever-increasing demands for power. Extreme weather conditions such as heatwaves, ice storms, and high-wind events that damage lines and transformers or put high stress on the system could result in city-wide blackouts lasting weeks.
Those living in rural communities may be in for the worst when it comes to power supply interruptions. Under the best of circumstances, response to downed lines can be sluggish outside city borders. Under depression conditions, expect longer delays. Being off-grid means that power disruptions don’t impact your life at all. Huge incentive.
Water Supply Issues
Water and electricity are closely connected: most municipal water relies on enormous pumps to convey it from station to station and into water towers. It takes very little mismanagement to disrupt or foul a water supply, which is important for city-dwellers to remember.
Folks in the country using small water companies have likely experienced disruptions and contamination from time to time. All the more reason to have your own well and a hand or solar-powered pump.
There is plenty of reason to believe that in a full-blown economic depression, hospitals may operate at a compromised capacity. This is not to say there won’t be adequate electricity, water, and hygiene maintenance, barring any disruption to the supply chain.
But obtaining pharmaceutical drugs may be a challenge for smaller hospitals and clinics, and even for larger facilities if there are major cuts to the government systems that many people rely on to manage skyrocketing costs of medical care in America.
During a major depression that includes hyperinflation, it may become impossible to pay for medical care. This would inevitably result in layoffs of medical staff and a cascade of resulting issues with health care facilities.
As is often the case in difficult times, infants, pregnant women, people with disabilities, and those with chronic health conditions will be the most vulnerable. Curable illnesses may see spikes in hard-hit areas.
It is impossible to say what the situation would look like on the ground in a country as heavily-armed as America, but if history is any indication, violence will be far less widespread than many might predict.
During the Great Depression, as city and state coffers grew thin, there was less money to pay the salaries of firefighters and law enforcement, and many abandoned their posts. This created a dangerous environment for the people in need of such services.
Looting and riots are not a typical response to an economic crisis, but rather a political one. So, depending on the root cause and severity, it is possible that we could see such violence–especially with understaffed law enforcement agencies keeping the peace.
Despite the divisive messages we receive from the media, Americans are largely a kind people who take care of one another. It stands to reason that decency will prevail even in the worst of times.
It has been several generations since Americans have suffered from the deprivation of a great depression, so it would come as a shock to the system. But a modern great depression might be just the thing required to realign a currently broken system.
One thing is certain: people living off-grid will fare better in a modern depression than those reliant on public infrastructure and logistics.
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Americas infrastructure has decayed because of one reason : It is made up of 50 states. It is virtually impossible to convince them to work together on a a project that helps ALL 50 States.
Elbert Jones says
Has the economy crashed since Biden’s been in office?
I do not expect our economy to totally crash anytime soon.
Has the Dollar crashed since trump LOST the Election?
Has any Concrete( 100%solid ) voter fraud Evidence been found yet?
Is our national inflation rate as high as it was when Nixon was in office?
How many of you voted for trump again? or believe that the election was stolen from him.
Has the U.S. economy gone to hell since Biden has been in office?
I’m waiting to see what’ll happen to the Congress members who must testify before the !-6 investigation.
A lot of the rioters believed that trump would pardon them. Why didn’t he do it?
I do not expect a total melt down to happen anytime soon. The #1 currency used for black market purchases is still the U.S. Dollar.
The Chinese Govt.’s #1 foreign investment is U.S. treasury Notes. So If we go under; they will too.
Elbert Jones says
trump’s tax cut mainly helped the Top 1% tax bracket people(in other words people like him).
Did it help you”True American”?
We recovered from the last great depression because of F.D.R.’s NEW DEAL work programs.
Why can’t the same be done today?
Jude Susia says
By the time FDR took a hand, people were literally starving to death. He quite literally SAVED America, amid the outraged screams of conservatives: NOT THE ROLE OF GOVERNMENT!
Today Republican conservatives are in charge, and as we can see from the Republican Senators’ handling of Trump’s trial for impeachment, the powers that be are perfectly happy to be led by a lying, larcenous, criminal tool of a hostile foreign power and to ignore the findings & warnings of our own FBI & CIA.
The reason we can’t have a NEW DEAL today is Donald Trump working from Vladimir Putin’s playbook strategizin the downfall of America, aided & abetted by a greed-driven GOP.
Elbert Jones says
It’s funny that you have survey questions that support trump with this article. He recently got a huge tax cut passed. It mainly helps corporations. Plus The top !% economic in America. America’s infrastructure is greatly in need of extensive work. F.D.R. created Jobs that helped get us out of the Previous Great Depression. Many of them improved America’s infrastructure. Why hasn’t trump done the same thing?
Exactly. For example, in my area the bridges literally fall in while people are driving on them. Seems obvious that jobs are there, they’re just not being done, someone who controls the purse strings thinks that having bridges that fall in that thousands of people use daily and connect two key areas, is somehow not a concern.
Happy Motorist says
Hope for the best but expect the worse. If you are in a city, you will die. Living in the rural areas with a well and a garden and able to fish and hunt trumps it all. Long term neighbors who are like minded and a low population density in a mild climate are is the best.
You do realize that as soon as urban areas become untenable, ALL those people will be headed right for you! Unless you are so far out in the boonies that you only go into your small town once a week to get your mail. That town will be over run.
John Galt says
“Despite the divisive messages we receive from the media, Americans are largely a kind people who take care of one another. It stands to reason that decency will prevail even in the worst of times.”
How naive are you? 3 days without power and it all falls apart.
The author keeps saying, “historically speaking”, “historically speaking”. Historically speaking is not TODAY’S REALITY. Look at all the violence we see on a regular basis. It does not matter if it is economic or political inspired. Today’s reality is that there is a massive population boom that encapsulates MANY more individuals that are of a violent nature. The numbers of violent, unstable, criminal minded, and the just plain crazy practically guarantee there will be MUCH violence in any disrupted societal meltdown no matter the cause of the meltdown. Simple blackouts cause rioting by lowlife jungle hoppers who want bigger TV’s for free and fancier pieces of cloth and plastic on their feet. Thats just a simple example we see often. Gangs are much more prevalent these days also and we see what it is like in Chicago, New Orleans, Philadelphia, Baltimore, virtually anyplace that Liberals have ruled for decades and have promised the lazy, criminalistic, IQ dumbed down deliberately losers who crap in the streets like SF. We will see all of those types commit violence not to mention fathers wanting to feed their children. No matter the reason for a nationwide collapse, there will be violence on a wide scale due to today’s lack of respect for each other and the law in a massive spectrum of current population. You would be better off being prepared for that eventuality than hoping your fellow neighbors or local populations have their heads buried in the sand and in a state of denial like those who turn the other cheek or tremble at the thought of having to defend themselves.
Elbert Jones says
It’s funny that you mention Hyperinflation; unemployment, and hospital issues in this article. Plus show that you support Donald trump.
He has not done anything to decrease the cost of prescription drug prices in America. His recent tax cut has greatly decreased the amount of money being paid to the Fed. Govt. .
True American says
Trump is doing the best he can under the circumstances? Democratics have done nothing but fight him on everything! They can not stand that we have a president in office that is for the people? They want power at all cost!!! They pray on the weak, and uneducated, and the youth that don’t know any better? Democratic socialist? What a joke!!! They are hard core communist!!! Plain and simple? You have to be a complete fool to belive socialism works? Look at history!!!! Killed 100s of millions all over the world?!! Never worked, and never will!!! We need to stand with our president, and our constitution?!!! I just hope and pray people will open their eyes, and see the truth?!!!! God bless the USA, and God bless all!!!!
You’re joking! This clown had 2 years of both houses on his side, he made brash claims of already having plans (which he never revealed, Because it was all bullshit) to cure the countries woes. He hasn’t done a damn thing except play golf to the tune of millions of tax payer dollars going right into his crappy businesses. And you are a fool to even think let alone call him “our” president. You obviously have NEVER, EVER had any dealings with the Donald! I have, working for a contractor doing work for him. He is and always has been a conman. Please, open your eyes before he creates a situation that closes them permanently.
Mensa Graham says
People such as yourself should at least use GoodRx IT will show you and others that drug stores are the biggest thieves around.
How does the author show support for Donald Trump? Regardless of your answer, a Depression would reverse any changes in prescription drug costs for everyone. Unemployment is at historic lows across all demographics, stock market keeps hitting new highs, average wages have increased, what are you whining about??
What do you see happening to social security?
That will depend, trump has made noise about eliminating it and medicare, hell he has already made in roads on that. By cutting payroll tax, you know, the tax that funds social security and medicare.
That’s why you also need to read Edward H. Romneys Living Well on Practically Nothing, Josh Macks Hobo Handbook and FM 21-76 U.S. Armies Survival Manual. Study and then put into practice everyday.