Did The Great Depression Ever End?

Did The Great Depression Ever End?
According to statistics, depressions occur approximately every 75 years. However, to me, the Great Depression that struck the world in 1929 never ended. Let us now examine why this is the
000-109case.
Statistically, many deem that America recovered from the Great Depression in 1954 as the Dow Jones Industrial Average hit its previous high of 381 again. On surface, this might be the case. However, socialist solutions for this serious recession are getting increasingly expensive, laying the ground for a worse economic downturn. Thus, the depression never ended as it was just swept under the carpet.
Today, Social Security, Medicare and Medicaid cost US$65 trillion in total and this staggering amount is rising as the baby boomers advance in age. With the US economy in shambles now, it is extremely hard for the government to cough out the money. One way would be to issue US Treasury bonds for sale where the Federal Reserve buys them to print the required money.
As more money gets circulated in the economy, inflation will have to rise and the US dollar will become increasingly worthless. All other national currencies will suffer the same fate as countries have to keep their exports competitive against America's by devaluing their money. Signs of it are already showing now with a currency war between the yen and US dollar. With this, an inflationary depression will be spread worldwide, infecting every economy and creating havoc the world hasn't seen for very long.
To add on, as a way to protect savings during the Great Depression, the Federal Deposit Insurance Corporation (FDIC) was established to insure deposits of savers. While this protects savers, it also rewards bankers who take more risks because they know that the government will bail them out if they make mistakes. One clear example is seen in the recent financial crisis where the government simply handed out billions to banks via the Troubled Asset Relief Program when the big banks were caught up with problems.
Furthermore, this also covers up banking fraud as bankers can use loopholes in accounting to wriggle out of the law. With such decadence and deceit going on, what I can say is that deposit insurance only give savers a false sense of security while encouraging bankers to take more risks. When bankers undertake more risk, there will be a higher likelihood for gaffes to occur, making bailouts more frequent. This increases debt and thus inflation, paving the way to an inflationary depression.
Moreover, to insure the mortgages of its people, America created Freddie Mac and Fannie Mac, allowing politicians to control housing. Initially, this solution had its merits because it helped nip the depression in the bud by targeting housing. Housing was important then because most people have the bulk of their money tied in their houses than anything else and helping insure the people's most important asset would prevent the Great Depression from worsening.
However, as time passed by, the management in Freddie Mac and Fannie Mac began to undertake more risks, especially seen in the case when they insured sub-prime mortgages. Today, due to their misjudgments, they will cost billions to taxpayers.
Freddie Mac especially will be a bigger bailout than AIG (which cost US$180 billion). This is because rising unemployment will increase Freddie Mac's losses as it pays more for maintaining the houses they foreclose. As of March 2009, they took back more than 30,000 homes with each home at US$3,300 per month. Given such drastic scenarios, more bailouts will have to be granted and this will push it towards hyperinflation.
To add on, as a way to increase American sphere of influence, the Bretton Woods Agreement was signed in 1944, creating the International Monetary Fund (IMF) and World
000-203Bank that spread the fiat monetary system throughout the world. The significance of this lied in the Nixon Act during 1971 when the US dollar was severed from the gold standard. This is because during that time, the IMF and World Bank forced other countries to adopt America's fiat monetary system or be kicked out, disqualifying them for any benefit the membership could bring.
With economies worldwide now modeled after the US, if the US suffers a serious bout of inflation, won't they also be affected? Thus, because of this, America's economic health will determine the world's economic well-being. Given the various signs of inflation present in America's economy, the world will soon experience its fair share of inflation, bringing it nearer to dangers it never had before.
In addition, to pacify its unemployed population during the Great Depression, unemployment insurance was created in 1935, allowing the jobless to receive benefits for 26 weeks. The number of weeks would be increased if the economy worsens. For example, in 2008, 13 more weeks were added. Given this huge burden on government finances, debt simply has to be increased to fund such programs. Here, allowing the debt bubble to grow will simply push us nearer to see it bust, bringing the world a string of calamities and disasters.
Furthermore, to keep unemployment and prevent political problems from occurring, programs like Civilian Conservation Corps (CCC) and Works Progress Administration (WPA) were implemented. Such policies paid unemployed people to carry out government projects, being equivalent to paying the taxpayers with their money.
At first, this solution had its strengths as it prevented unemployment from worsening. However, when coupled with unemployment insurance, a problem is created because the unemployed now know that even if they cannot find a job, the government will support them.
Over time, inventive to get employed will be lowered while burdens on the government have to rise. Under such heavy pressures, the government has to borrow more money, causing a rise in inflation and unlocking more hidden economic forces. This problem is definitely exacerbated with many economies worldwide replicated from the US model, leading to a domino effect if something bad happens.
Hence, to conclude, given the threats many solutions from the Great Depression pose today, I do not subscribe to the idea that it ended. Here, with all these dangers lurking around in the US economy, the US dollar's status as the world reserve currency could be threatened.
Today, the US is rich because it can pay debts and trade with its printed US dollars (legalized fake money). With the world trading in US
000-280 dollars, demand for US dollars is maintained. However, if problems in the US grow to the extent that the US dollar loses its credibility (with excessive printing), rising powers like China will create new reserve currencies. This will spell doom for US and subsequently the world we live in.