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Are We In for a “Second Great Depression”? by Oliver DeMille

Second_Great_depressionIn my recent class on current events, I documented the effectiveness of one scholarly media source in predicting future national policies, elections and other governmental events.

The source is Foreign Affairs, a quarterly publication that seems to actually influence Washington more than simply provide forecasts.

Of course, forecasts are always a murky business, but Foreign Affairs has been highly accurate for many decades. This puts a lot of weight behind an article in the most recent issue, where J. Bradford DeLong writes that we may be facing a “Second Great Depression.”

He argues that despite many suggestions that the economy is improving, the reality is that the U.S. economy is now “worse than” frail. In DeLong’s words:

“Most economists claim at least one silver lining in the economic downturn: that it was not as bad as the Great Depression.

“Up until recently, I agreed; I even took to calling the episode ‘the Lesser Depression.’ I now suspect that I was wrong. Compare the ongoing crisis to the Great Depression, and there is hardly anything ‘lesser about it.”

DeLong continued:

“The European economy today stands in a worse condition compared to 2007 than it did in 1935 compared to 1929, when the Great Depression began. And it looks as if the U.S. economy, when all is said and done, will have faced certainly one lost decade, and perhaps even two.”

With the Great Recession starting in 2008, a “lost decade” would last until 2018. DeLong:

“The U.S. economy has enjoyed a recovery only in the sense that conditions have not gotten worse…

“But it is unlikely that the economic downturn will be over by 2017; no war or major innovation appears to be looming on the horizon that could propel the country into an economic boom the way World War II did at the end of the Great Depression.”

I read this to mean that we are on the verge of another Great Depression, unless something the scale of World War II can “help” us out of our dilemma.

Perhaps this is too pessimistic, perhaps not, but we are clearly facing some major challenges ahead.

DeLong also wrote:

“If the downturn drags on into a second lost decade, the United States will incur further losses equal to the output of a full average pre-crisis year, bringing the total cost of the crisis to 160 percent of an average pre-crisis year and nearly equal to that of the Great Depression.”

I have three thoughts about this alarming article:

First, if you’re not reading Foreign Affairs, start.

Second, I’m convinced there are people now considering how to get us out of recession — whatever it takes, including possibly war or other drastic measures.

I’m not saying this is a conspiracy, just that some people in power will believe such a course is in the best national interest.

I know that if I said this more strongly (like: “The only way out of a depression is war, and some in Washington may be planning a war for this very purpose”) a lot more people would probably read and forward this article.

But I’m not trying to promote fear; I’m genuinely concerned that bigger problems will be part of our near future.

We don’t need more extreme reactions, but we do need regular people to wake up and realize that difficult things are coming. Families and leaders need to wisely prepare, whatever is ahead.

Finally, and most importantly, whatever the experts like DeLong say, there is at least one group that doesn’t care what the forecasters, economists or government officials say. To paraphrase the old cliché, when the going gets tough, entrepreneurs get going.

A number of steel-chested entrepreneurs are looking at all the trends, realizing that some government leaders seem purposely committed to hurting the economy, and instead of buckling they are strategizing how to turn this into a time of great business growth.

This happened in during the Great Depression, and it is happening again right now. The economy is in for some rough times, but don’t count America out as long as the entrepreneurial spirit is still around. And it is.


odemille Oliver DeMille is the New York Times, Wall Street Journal and USA Today bestselling co-author of LeaderShift: A Call for Americans to Finally Stand Up and Lead, the co-founder of the Center for Social Leadership, and a co-creator of TJEd.

Among many other works, he is the author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, The Coming Aristocracy, and FreedomShift: 3 Choices to Reclaim America’s Destiny.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.


  1. Brent Hansen says

    We should fear, there are plenty of reasons. I read the article, and it seems pretty soft and almost smelled of Republicanism. BIGGER problems are a planned part of our future. This quote about Lenin shared by Keynes in “The Economic Consequences of the Peace” just about sums up the planned and systematic destruction of the U.S..

    “Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but also at confidence in the equity of the existing distribution of wealth.

    Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become “profiteers,” who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

    Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

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