The picture above is our image of the Great Depression. Men standing in line for soup. Of course, we don't see too many soup lines these days except for the homeless. We keep the less fortunate hidden away. We give them food stamps, or what today are called EBT cards. Its better this way. It doesn't scare the public or ruin the illusion that everything is OK since 2008. Its easier to feel like things are back to "normal". But they aren't.
Look at the image above and imagine that line extending beyond the picture. Imagine 45 million people standing in that line. That's how many people are on food assistance. Nearly 1 in 7 Americans.
For most people its difficult to imagine 45 million people, just as its nearly impossible to fathom the $1.3 Trillion deficits we've been running for the past four years. The number is astronomical. We use that phrase without thinking. "Astronomical" means the number are so large they're used almost exclusively to measure distances out in space. They weren't meant to be applied to our deficits. Yet here we are.
But if you still aren't convinced the downturn is comparable to the Great Depression, I would point you to this:
The Great Depression came about partly as a result of a severe fall off in economic activity (and made worse by poor policies). Economic activity can be measured by the velocity of money.
The easiest explanation of money velocity is to imagine an employer paying an employee their wages. The employee uses their wages to buy food from a store. The store then uses that money to pay their supplier and on and on.
As you can see in the graph above, the velocity of money has fallen below the level of the Great Depression. This is the reason that quantitative easing has failed. The Fed pumps money into the banks by buying treasuries. The banks, in theory are supposed to make loans which circulates more dollars into the economy. But they aren't. The under capitalized banks are either sitting on the cash, earning interest from the Fed on their excess reserves, or they are using the money to speculate on things like oil, corn or wheat and thereby driving up the costs for consumers. This is the reason the Fed's policies are enriching the bankers at the expense of the working poor (who four years ago were among the middle class).
Once again, we are seeing a Great Depression. Once again, poor policies are extending it. We are now in the fourth year. Japan has experienced over 20 years of the same. Yet our Fed is following the Japanese "solutions" almost exactly, and sadly, expecting different results.