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We Are Less Prepared for a Depression Than We Were in 1929

Posted By admin On March 1, 2009 @ 8:58 am In Commentary | Comments Disabled

George Washington’s Blog [1]
Sunday, March 1, 2009

Given that the Roaring Twenties were a time of speculation and excess, I wondered how personal savings rates compared with today.

The personal savings rate (“national income and product accounts of the United States”, or “NIPA”) was 4.5% [2] in 1929.

It rose as high as 26.1% [2] in 1944.

Now let’s fast forward to right before the current crash . . .

NIPA was below 1% [3] for most of 2007.

In other words, not only may this crisis be more severe [4] than the Great Depression, but Americans are less prepared for it, because they’ve squirreled away less savings.

Indeed, a new report shows that most baby boomers have accumulated little to no wealth [5].

Our savings is also dramatically lower than Japan’s when that country entered into its Lost Decade. So the Japanese were much better prepared than we are.

Of course, the American economy as a whole was also a lot stronger in 1929 than before the current crash.

We Are Less Prepared for a Depression Than We Were in 1929 obamadecept 340x169 [6]

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URLs in this post:

[1] George Washington’s Blog : http://georgewashington2.blogspot.com/2009/02/we-are-less-prepared-for-depression.html

[2] 4.5%: http://www.ebri.org/pdf/publications/books/databook/DB.Chapter%2009.pdf

[3] below 1%: http://research.stlouisfed.org/fred2/data/PSAVERT.txt

[4] more severe: http://georgewashington2.blogspot.com/2009/02/paul-volcker-crisis-may-be-even-worse.html

[5] little to no wealth: http://www.moneymorning.com/2009/02/26/baby-boomers-retirement/

[6] Image: http://www.prisonplanet.tv/subscribe.html

[7] Dow Jones Bloodbath Mirroring 1929 Rout: http://www.prisonplanet.com/dow-jones-bloodbath-mirroring-1929-rout.html

[8] World Economy Falling Faster Than in 1929-1930: http://www.prisonplanet.com/world-economy-falling-faster-than-in-1929-1930.html

[9] Documentary Featured on Fox Blames Baby Boomers for Depression: http://www.prisonplanet.com/documentary-featured-on-fox-blames-baby-boomers-for-depression.html

[10] REMEMBER: In 1930, They Didn’t Know It Was “The Great Depression” Yet: http://www.prisonplanet.com/remember-in-1930-they-didnt-know-it-was-the-great-depression-yet.html

[11] Nothing Can Stop It: “An Economic Collapse that is Going to be Worse than 1929″ *Video*: http://www.prisonplanet.com/nothing-can-stop-it-an-economic-collapse-that-is-going-to-be-worse-than-1929%e2%80%b3-video.html

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