“We’re just in the eye of the hurricane now. It seems calm. But the other side of the storm is going to hit soon. And it’s going to be much worse…”
Doug proceeded to list all the reasons this storm will cause more devastation than the ’30s tempest.
For one thing, people have much more debt. There was relatively little consumer debt in the ’20s. Credit cards hadn’t been invented yet. And if you wanted to buy something from a store you had to pay for it in advance. They had ‘lay-away’ plans. You could pay a little each month. Then, when you’d finished paying for it, they’d give you the merchandise. Generally, people still believed in saving money.
There was no expensive social-welfare establishment.
There were few bailouts and few boondoggles.
The US government had little debt and was relatively little-involved in the economy.
The US had a positive trade balance.
The US was still a growing, dynamic economy…and the world’s leading exporter.
And the US wasn’t involved in any foreign wars. Its military expenses were trivial compared to those of today.
People wanted to invest in the US. The US dollar was backed by gold.
“Now, smart Americans are getting their money out of the US,” said Doug. “This time it’s going to be much worse.”