Too many of our politicians and news personalities will mention the present economic crisis and then in the same sentence make a reference to the Great Depression from 1929-1941. I really don't think we are headed to another great depression but hopefully, there is a reconstruction coming. We'll be fortunate if the depth of the economic downturn is not as severe nor the time period as extended. The Great Depression comparison is not that surprising as much of the political and economic sentiment in 1929 and 1930 is similar to what we hear from our not-so-great statesmen of today.
Take for example the Stock Market crash of 1929. The years preceding the crash were a time of great prosperity. The stock market was going through the roof and while there was a charge that the "rich were getting richer", most historians agree that all economic classes were prospering.
However, too much debt, too much leverage and the banks ultimately failed. A situation not unlike today in many ways. For example, the percentage of households buying cars on instalment more than tripled between 1919 and 1929, rising from 4.9% to 15.2%. Home mortgages were also on the rise as easy-credit seemed to improve the standard of living for most Americans.
The Republicans were blamed and the Dems won. While Franklin Roosevelt was an impressive political figure and was head-of-state during World War II, few of the campaign promises of the Roosevelt platform of 1932 were honored. The massive national debt of the previous administration under Herbert Hoover reached a high of 40% of GDP, but Roosevelt's debt ratio went well over 100% of GDP by the time the war had started in 1941 and of course higher afterwards. Expansive new government programs of the New Deal expanded the federal government. Unemployment, the cruel output of a depression, which today stands at about 6.1 %, was never lower than 17% during the Roosevelt administration and was at 25% when the Japanese attacked Pearl Harbor.
Hopefully, a reconstruction is coming. A reconstruction of our economy based on principles rather than simply opportunity; and a spiritual reconstruction of our lives based on Biblical principles rather than popular and contemporary fads and myths. We can all pray that the times and season of the transition will be relatively short and not as severe as the Great Depression.
