Imagining the Devastation of the Approaching Depression

The approaching “Great Depression” will be far worse than the last one. Our current economy is far more bloated than the economy of the 1920s. Imagine dropping a champagne glass from the top of the Statue of Liberty. Now imagine dropping a crystal chandelier from the top of the Empire State building. The impending devastation is unimaginable.

The Great Depression lasted nearly 15 years, and then recovery was accelerated significantly by the economic stimulus provided by the spending for WWII . Our situation is more desperate because the current government is already nearly bankrupt. We can’t afford four or five years of trillion dollar deficit spending. The looming depression could easily last 20 or 30 years.

Finally, the worst of our problems is that only about 10% of our workforce is employed in manufacturing (according to the CEO of General Electric). Unemployment will increase to 50% if the economy collapses to the point where manufacturing represents 20% of the workforce. Unemployment will jump to nearly 80% if the economy shrinks to the level where manufacturing represent 50% of the workforce. Manufacturing is the only way to produce “real” wealth! Service industries only move money around (and create “bubbles”), and a sustainable economy must have a significant (probably at least 40%) manufacturing component.

Avoiding a depression is much easier than trying to fix an economy once it has collapsed. Manufacturing is the only way to build an economy. China and Japan provide good examples of the long hard road to successfully building a large strong economy. Increasing our economic base (manufacturing) is going to be a long hard task, and it will be nearly impossible from the bottom of a devastating depression.

The choice is clear! Either implement a plan to achieve immediate economic recovery so that we can rebuild our manufacturing sector within a robust economy, or try to rebuild our manufacturing capability from deep within a crippling depression.