World ecomonic slowdown: The lesser depression

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http://economictimes.indiatimes.com/opinion/comments-analysis/why-economies-of-us-and-eu-are-still-depressed/articleshow/9331212.cms

These are interesting times - and I mean that in the worst way. Right now we're looking at not one but two looming crises, either of which could produce a global disaster. In the US, right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets. Meanwhile, if the plan just agreed to by European heads of state fails to calm markets, we could see falling dominoes all across southern Europe - which would also wreak havoc in world financial markets.

We can only hope that the politicians huddled in Washington and Brussels succeed in averting these threats. But here's the thing: Even if we manage to avoid immediate catastrophe, the deals being stuck on both sides of the Atlantic are almost guaranteed to make the broader economic slump worse.

In fact, policymakers seem determined to perpetuate what I've taken to calling the Lesser Depression, the prolonged era of high unemployment that began with the Great Recession of 2007-2009 and continues to this day, more than two years after the recession supposedly ended.

Let's talk for a moment about why our economies are (still) so depressed. The great housing bubble of the last decade, which was both an American and a European phenomenon, was accompanied by a huge rise in household debt. When the bubble burst, home construction plunged, and so did consumer spending as debt-burdened families cut back.

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1. During the depression we created Social Security.

how on earth can we be proposing to weaken it? Especially now.

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2. India's not immune

Look at the rate of Indian farmer suicides in recent years.

It's not an American-made crisis. It's not a European-made crisis. It's an upper-class made crisis. They designed all this to happen.

What happens in a Monopoly game when one person owns Boardwalk and Park Place while the others own the purples and the light blues. Who wins?