Great Depression?

With all that we hear every day about how bad everything is economically, you'd think that we are truly in, or nearly in, a Great Depression. True, there are problems. True, there will be some hard times ahead. But a Depression? That term is thrown around so easily, but the Great Depression was BAD! Media tends to sensationalize anything and everything - and our economic situation is no exception.

Let's remember that God is on the throne and continue to pray for Canada. May God use this time to cause us all to examine our hearts and look to the Prince of Peace to find true peace - regardless of economic circumstances. Let our priorities be His priorities.

I read this blog by Ezra Levant (see below) and it has another perspective backed up by some interesting facts. I don't agree totally with his conclusions (everything will be fine, etc.), but I do feel that things are being overblown by our media.

So we’re in for another Great Depression, are we? Don’t believe it.

Now that the epic U.S. presidential race is over, a caffeinated press corps is in withdrawal, so hyperventilating about a new Depression is their new fix. Just to pick one newspaper at random, Toronto’s Globe and Mail used the phrase “Great Depression” over 300 times in December alone — or about a dozen times each edition. And that’s restrained compared to U.S. cable news show.

Barack Obama, who once gave a speech suggesting his presidency would mark the “moment when the rise of the oceans began to slow and our planet began to heal,” lowering messianic expectations of him, by exaggerating the economic troubles he’s inheriting, is a political priority.

True, unemployment in the United States is ticking up, approaching 7%, and some economists think the figure might crest at 8%. For the millions of people this affects, that’s bad news — but it’s hardly comparable to the Great Depression of the 1930s, when more than 25% were unemployed, over 50% in some regions. If 8% unemployment is considered a Great Depression, then Canada has been in a Great Depression for most of the last 30 years.

The IMF predicts that U.S. GDP will dip by 0.7% in 2009. Again, not good news. But a Great Depression? The U.S. economy shrank 12% in 1930, another 16% in 1931, a whopping 23% in 1932 and another 4% in 1933. That’s a Great Depression. A 0.7% dip is America taking its foot off the gas for a moment.

The decline of North American auto makers isn’t a sudden crisis. It’s the free market doing what it should: penalizing companies that pay domestic auto-workers six-figure incomes to do what Japanese automakers do for five figures. Canada’s Big Three have 27,000 unionized autoworkers building cars — and 40,000 more retirees collecting pensions. That’s why they’re in trouble.

Canada will do just fine. We’re entering 2009 with nearly the lowest unemployment rate in 30 years, with lower debt, no structural deficit and an enormous stimulus in the form of tax cuts already working through the economy. The real threat is fear-mongering politicians looking to grow government, and opportunistic businesses happy for a new excuse to ask for handouts.