2010 Will Be Worse

by Monty Pelerin - January 1st, 2009 - American Thinker

The year 2010 is likely to be the pivotal year where pundits stop referring to the recession and begin openly talking about a depression.

Our economic problem is rather simple to describe: There is too much debt relative to income and/or wealth. Below is a single graph that depicts the condition of our economy. It shows total debt of the U.S. as a percentage of GDP from 1870 forward.

The chart below is from the article.



What is clear is that on the only two occassions where we permitted debt to soar our of control, the result was a debt fueled boom followed by a severe depression. Last time that depression only went away when we got debt under control. Why are there so many who think that if we ignore this history it will not be true this time?

Last time it took a World War to get our economy out of the depression. What will it take this time?