The Great Depression of the 1930s is burned into most preppers’ minds. The horror stories from that grim time are a stark reminder of how fast things can go bad, even in a country that seems rich, strong and confident – and of how bad they can get.
As a motivation to be prepared, the Great Depression takes some beating.
But what if, as well as a reminder of why prepping is a good idea, it’s also what we need to be preparing for?
Many economists believe that another Great Depression could throw the world back into the poverty and chaos of the dustbowl era, and some think it’s likely to happen this year.
Paranoid? Alarmist? Well, they have a lot of evidence on their side – too much to just dismiss.
Technically, the Great Depression lasted for four years, from 1929 to 1933. In reality, it took until 1940 for US GDP to recover to its 1929 level, and even then unemployment was still at 15%. Only the militarization of the economy for World War II finally swept away the Great Depression’s after-effects.
Is A New Depression Coming?
When the Covid-19 pandemic hit, it threw the US economy into recession in a matter of days. In the second quarter of 2020, US GDP fell by 31.4% – one of the fastest and deepest falls ever.
However, according to the National Bureau of Economic Research, the 2020 recession was also the shortest ever; officially, it lasted just two months. Technically it was too short to qualify as a recession at all.
There’s a lot more to the story than that, though. Our economy has bounced back a long way from the damage lockdown did, but it’s still in deep trouble – and the government is storing up even more trouble for the future. There are a lot of pieces moving behind the scenes, and if they line up wrong a depression could hit us fast and hard.
A lot of Americans are still jobless. In June 2021 the unemployment rate stood at 5.9%. That’s a long way down from its 14.7% peak last April – but a long way up from the 3.5% we had last February. Millions of Americans who were working 18 months ago are unemployed now, and the growth in jobs seems to have slowed.
Unemployment fell by 7% in the six months after the April peak, but only 1.9% in the next nine months. The June 2021 figure was actually slightly up on May, which alarmed economists who’d been expecting another small drop.
Despite unemployment that in normal times would be a national scandal, the government is paying people to sit at home. In many states, the jobless can still claim an extra $300 a month in federal assistance. If you were in a low-paid job, regular unemployment plus an extra $300 might just be enough that you don’t really want to go back to work.
Unfortunately, businesses need low-paid employees too – and having so many of them out of work is slowing our economic recovery.