Depression on the Horizon

The Great Depression of the 1930s was the worst economic crisis in the history of the United States.  Income, prices, and profits dropped, because people began to spend less money.  Later they didn't have any extra money to spend.  The profits at many companies suffered, which worsened the situation.  Unemployment soared, and many businesses closed.  And now, some world-famous economists of today fear a repeat of the Great Depression looms on the horizon.

During the last several years, the value of the dollar has dropped.  In addition, it remains weak when compared to other currencies, mostly because of the debt of the United States.  The US must borrow about $3 billion to fund the economy every day, which makes the deficit larger and larger.  In fact, the debt may possibly be irreversible.  If there were a run on the dollar, it could trigger a global financial crisis.

In the US, there are some signs of the approaching disaster.  Bear Stearns, a major financial institution, went bankrupt.  The Federal Reserve has lowered interest rates several times.  A record 28 million people now rely on food stamps, which are a symbol of poverty, for their daily needs.  And let's not forget the housing crisis affecting America.

What could the US do to avoid the crisis?  Americans would need to stop spending and start saving, some economists believe.  Americans would also need to start producing rather than consuming products.  Unfortunately, these steps would cause a recession in the short term, which no one wants.  But a depression will definitely occur, and every day on the same course only worsens the severity of the eventual crash.

Previews:

Title:  Speculate and/or discuss the contents of today's article from its title: Depression on the Horizon."

Fill in the Blanks:  Fill in the blank with the correct word.

1. The profits at many companies (                         ), which worsened the Great Depression of the 1930s.

2. Unemployment (                         ), and many businesses closed.

3. Some world-famous economists of today fear a repeat of the Great Depression (                         ) on the horizon.

4. The US must borrow about $3 billion to fund the economy every day, which makes the (                         ) larger.

5. The debt may possibly be (                         ).

6. If there were a run on the dollar, it could (                         ) a global financial crisis.

7. Bear Stearns, a major financial (                         ), went bankrupt.

8. A record 28 million people now (                         ) on food stamps for their daily needs.

9. Food stamps are a symbol of (                         ).

10. Every day along the current course only worsens the (                         ) of the eventual crash.

Post-Comprehension: Talk about the following questions in pairs/groups.  Remember to support your answers!

1. What do you know about the Great Depression of the 1930s?

2. Do you think a similar problem could occur in the US? Why/not?

3. If there were a depression in the US, how would that affect your country? Please explain.

4. Many countries have risen and fallen throughout history. What do you think will happen to America?

5. What would you do if there were a depression, you lost your job, and had used all of your savings?

Google Search: Type "dollar crash" into Google. Look at the websites, and/or read additional articles on this topic. Discuss or write an essay about your findings.

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