The national debt came up last night at the debate, with Obama pointing out that it's doubled since 2000. Yikes. The famous debt clock in New York City, the one that calculates what we owe right before your very eyes is feeling the squeeze — literally. The counter, put up in in 1989, just ran out of space to calculate the debt as it passed $10 trillion. Oops. I know it seems all gloom and doom but how does what's happening now stack up? Here's a quick and dirty look at economic uh-ohs through the ages:
- The Panic of 1907: After a 25 percent decline in the market left investors scared and pulling money out, and the government dependent on JP Morgan to help stop the domino effect, the government created the Federal Reserve System.
- The Wall Street Crash of 1929: Over the course of three days, three times the normal amount of shares were traded causing prices to tumble. On Black Monday and Tuesday, the market lost 13 and 12 percent respectively. That week's losses were $30 billion, 10 times more than government budget and more than the cost of WWI. When it reached bottom in July 1932 the market had lost 89 percent and would take 25 years to recover.
To see the rest,
- The Great Depression: On President Hoover's watch, 9,000 banks failed and newly homeless Americans set up shanty towns called "Hoovervilles," an image that haunts his legacy to date. When Roosevelt took over in 1933 he initiated the New Deal, the effects of which we still see today in Social Security, the FDIC, and the FHA.
- The Oil Crisis of 1973: When the US supported Israel in the Yom Kippur War against Syria and Egypt, members of OPEC shut off oil exports to the US quadrupling the per-barrel cost of crude. The government responded by rationing gas and imposing a national speed limit of 55 m.p.h.
- The Savings & Loan Crisis of 1989: The real-estate boom of the 1980s caused the S&L industry to grow very quickly, overextending the institutions whose job was to collect money from people in the form of savings, and then loan that same money out in the form of mortgages. When people started pulling their money out for higher interest rates in money market accounts, trouble, also the Keating Five, ensued.
For five more economic panics that lend at least a little perspective on the current day, and more info about the five above, the whole piece is definitely worth a read.