In: Economics
Today none of us believes that we will be hit by another great
depression.The things are on rise since last 10 years and we hope
they will continue to remain the same.
During the great depression Banks, insurance companies, and big
corporations went under on a major scale. Institutions suffered the
consequences of past mistakes, and there was no financial safety
net to catch them as they fell.
Today, conditions are same but everyone relies on goverment that it
will make things better by interfering.
Unemployment was on the rise during the great depression. If a
person lost his job he would immediately have to find one so that
his needs are fullfilled. Demand of labour was low and supply was
high so wage rate decreased.
Today there are minimum wage laws and job insurance and people can
live for few months without job by depending on welfare laws so
recovery time if depression hits us now will be very high.
Welfare -There were very, very few people on welfare during the
last depression.
Today
It's hard to say how those who are still working are going to
support those who aren't in this depression. Even in the U.S., 50%
of the country is already on some form of welfare. But food stamps,
aid to families with dependent children, Social Security, and
local programs are already collapsing in prosperous times.