26 March 2008
There are a number of similarities between the financial situation seen in the 1930s and the one taking place today, it has been claimed.
Writing for Socialist Worker, Anindya Bhattacharyya said that in the 1920s the US had a thriving economy that was eventually undone when the market crashed.
At the time, growth in the economic sector was seen via credit, even if finance in today's climate is made up via bonds and loans, he wrote.
He added that today massive debts are being seen because consumers have had to take out loans and credit cards in order to afford consumer products.
"And unlike in previous decades, this consumer credit bubble has been engineered as a necessary measure to keep the economy growing," he commented.
However, the credit crunch may not lead to the "dramatic" events of the 1930s, she stated, as a similar problem in Japan was met with a "slow-burning recession".
The stock market crash of 1929 is commonly known as the Wall Street Crash.
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