Are We Heading For A Great Depression?

Financial advisers  and economists around the world are all stating that America, Europe, and the connected global nations are heading for an economic crisis far worse than the Great Depression. Here is why they think 2020 will usher in global market crashes and a global economic apocalypse.

1. Unemployment is increasing out of control with no plans to stop it. During the Great Recession from 2006 to 2009, unemployment reached a staggering 10.4 percent, which would equate to 1 out of 10 Americans being unemployed. During the Great Depression of the 1930’s, unemployment reached an astounding 25 percent, equating to nearly 1 out of 4 Americans being unemployed. As of June 2020, the current unemployment rate in America was 16 percent and is rising daily. Economists believe that if something does not change, unemployment rates will soon match the rates seen during the Great Depression. However, unlike the 1930’s, which used war and federally funded programs to boost the economy and lower unemployment, the government has yet to propose any long term plans to curb the ever increasing unemployment crisis.

2. The job market is dwindling more and more everyday. Many economists already predicted that the post-Baby Boomer generations would have to deal with a shrunken job market due to globalization, automization, robotization, and the death of many brick and mortar retail shops due to the preference for online shopping. Now, on top of those issues, this generation of employees will have to deal with massive small business closures, budget cuts in all sectors, and decreased hiring for nearly all businesses due to the loss of revenue driven by Covid-19 pandemic and the subsequent lock downs. 

3.There is a looming housing market crash on the horizon. Most have already heard about the rent crisis as those who are unable to pay their rent are soon to be evicted with no place to go. However, on top of that, is the mortgage crisis that is also heading this way. Like the unemployed renters, unemployed homeowners are also struggling to pay their bills. However, unlike many of the unemployed renters who have received rent assistance, unemployed homeowners have been left to deal with the crisis on their own. The government has yet to pass any provisions that would grant homeowners protection from foreclosures during this crisis and banks are already preparing for the crash. Many are reporting that banks are setting aside billions to prepare for massive loan defaults, especially mortgages.

4. All of the government’s plans are short term and costly. Sending every American a stimulus check and bolstering up employment payments will not lead to any lasting benefits.  A stimulus package is supposed to be a temporary bridge to keep people afloat until employment rises and markets stabilize, but the issue is there are no plans proposed to increase employment and stabilize markets. There are also no plans showing who and how these stimulus plans will be paid for. Without showing how these trillions of dollars will be paid back, the value and integrity of the dollar may be weakened which could have terrible consequences for this generation and the following ones. 

5. The Coronavirus Pandemic is not over. The pandemic has been on American shores for about seven months, but the damage will be lasting. Further compounding the issue is that there is no clear idea of when it will be over. Many are predicting that the pandemic will get worse before it gets better and if that is true, there could be even more lock downs and thus even more unemployment and budget cuts around the globe. Think of all the global industries that have already been devastated by the pandemic. The cruise industries employed thousands and brought tourists around the globe, bolstering economies all around the world and now they are facing bankruptcy. And the cruise industry is not alone. AMC hired a bankruptcy lawyer, Disney is laying off workers left and right, the airline industry is begging the government for a bail out, the banking industry has started hoarding money in their reserves for loan defaults, governments around the world have frozen hiring and slashing their budget due to revenue loss, many gym owner are also preparing to declare bankruptcy, hotel owners are also fearing future bankruptcy and many destinations, stores, and restaurants that depended on tourist are closing their doors permanently, and all of this is from the first wave of lock downs, so imagine what second wave of lock downs will do.