In a video that has taken the internet by storm, a woman known as Smashley makes a thought-provoking case, asserting that the United States isn’t merely on the brink of a recession but has already plunged headlong into what she deems the most severe depression in history.
Drawing parallels to the Great Depression of the 1930s, she posits that the economic challenges faced by contemporary Americans may even surpass the hardships endured by their predecessors from that era.
Her compelling argument has ignited intense debates and raised critical questions about the nation’s economy.
The Great Depression vs. Today
During the worst year of the Great Depression in 1933, 25 percent of Americans were unemployed, and those who retained their jobs had to accept nearly half the pay.
Adjusted for inflation, the average salary is $95,000 as of 2023. Smashley starkly states,
“If you are not currently making six figures, you are doing worse than someone in the Great Depression.”
The Housing Market
Adding to the economic woes, the housing market is also dismal. In 1933, a house cost an average of $3,900, more than 90 percent of the average American’s salary.
Today, houses cost an average of $436,800, with the average American salary of $50,000 barely covering 11 percent of that cost.
The Struggle of Millennials
Millennials, in particular, are feeling the pressure. Despite expectations to be financially stable, have a family, and buy a house right out of college, many find these goals unattainable.
The system seems designed for failure, with corporations intentionally keeping wages low while protecting their own profits.
Anticipated Recession In 2023
Economists forecast a likely recession in 2023, with a consensus view leaning towards an economic contraction. The Federal Reserve’s actions to combat high inflation by raising interest rates are expected to lead to this downturn.
Historically, such measures have resulted in a recession as the economy struggles with higher interest rates. Despite the anticipation, opinions vary on the depth and duration of the expected recession.
Some economists believe the Federal Reserve can avoid a recession by raising rates long enough to prevent stifling growth. However, the prevalent expectation is that the economy will experience a downturn, a sentiment echoed by many CEOs and experts.
The Federal Reserve’s Role and Future Expectations
The Federal Reserve, which had previously stimulated the economy by taking interest rates to zero and boosting market liquidity, is now unwinding these measures, contributing to the slowdown.
The current battle with inflation leads to additional rate hikes, impacting sectors like the housing market, which has seen a significant decline in home sales.
Despite these measures, the Federal Reserve does not forecast a recession, projecting the economy to grow at a pace of 0.5% in 2023. However, the market expects the Federal Reserve to start cutting rates by the end of 2023, anticipating a downturn due to the current economic policies.
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Sources
- cnbc.com/2022/12/23/why-everyone-thinks-a-recession-is-coming-in-2023.html
- cnbc.com/2020/06/09/the-us-is-officially-in-a-recession-will-it-become-a-depression.html
- aljazeera.com/features/2023/2/9/is-a-2023-recession-the-cost-of-fighting-inflation
- cnn.com/2022/10/02/business/global-recession-fears-explained/index.html
This article was produced and syndicated by Viral Chatter.
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Martha A. Lavallie
Martha is a journalist with close to a decade of experience in uncovering and reporting on the most compelling stories of our time. Passionate about staying ahead of the curve, she specializes in shedding light on trending topics and captivating global narratives. Her insightful articles have garnered acclaim, making her a trusted voice in today's dynamic media landscape.
