It feels eerily familiar: Stocks are plummeting. The economy is slowing. Politicians are scrambling to find solutions but are mired in disagreement.
Many Americans are wondering whether they are in for a repeat of the financial crisis of 2008.
No, this is not a repeat of 2008. This time will be worse. Why? Because:
1. All of the problems we had in 2008 are still with us in 2011. We have done absolutely nothing to actually address the underlying problems that led to the crash of 2008. All of the same people are still in charge (I'm referring here to all the Goldman Sachs alums running the treasury). All of the same policies are still in place. All we have done is throw a few hundred billion dollars at the economy, which has been enough to stave off complete catastrophe for the past three years.
2. We have used up what little margin we had. Back in 2008 we had money (well, to be more precise, we could borrow money) to throw at the problem. Finding more money to borrow to throw at the problem to stave off catastrophe this time will be much harder, and in the current political climate, probably impossible.
The result, almost certainly, will be at best a double-dip recession. And we might be looking at Great Depression, the sequel depending on how long it takes for the American People to come to their senses and abandon the tea party.
I've said this before, I'll say it again: the fundamental problem with the United States of America is that at all levels of society we have lost sight of the difference between money and wealth. At every stratum, from the very bottom to the very top, you can find overwhelming majorities of people who believe that having a lot of money is the same thing as being rich. And what these people are about to find out the hard way, like they did in the Weimar Republic, is that it isn't true.
The parallels between what is happening today and what happened in the world in the 1920's and 30's is really getting very eerie indeed, including all of the people who are saying that it can't get that bad. It might not. But it can. And if we don't do something about it, it will.