Originally posted by: halik
Originally posted by: SickBeast
Here's the thing:
The great depression was caused by too much credit spending.
The free market more than likely looks at what the governments of the world are doing as reactionary and unfair. Who wants to invest in a market where there is interference to this extent?
There are two phenomena affecting the US economy right now: the boom in China/India, and the retiring baby boomers.
We can survive without banks and without government. What's going on is not the end of the world. It does, however, affect our children, grandchildren, and great grandchildren.
To directly answer the question, IMO the markets would be higher right now without the intervention. Regardless, they are not the true indicator of our wealth as a populace. Look at how much money the government prints, inflation, and the national debt per capita.
No, the depression was caused by Fed tightening in 29-32, which brought on liquidity crisis and the collapse of banks. This was pre-FDIC, so people lost money, which in turn reduced discretionary spending and so and and so on.
Our debt to GDP is dead slap in the middle of G8 nations and it's in no way the cause of this problem. Nor is government intervention, as a matter of fact the credit markets are thawing finally after all the liquidity injections (overnight libor down to 2.xx%, 3mo libor dropped slightly also)
Please do yourself a favor and get some real education instead of reading long-debunked bullshit from libertopian blogs. I'm gonna venture a guess and say you do some sort of IT job and never taken a single economics course in your life or had anything to do with running a business (judging by your remark about surviving w/o banks)