Word: crashing
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Dates: during 1980-1989
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...happily driving his car 55 mph. He approaches a four-way intersection where the traffic light is broken. He and three other cars are driving full speed toward each other--it's too late to avoid a collision. Horrific screeches and cries are audible as the vehicles crash head-on, and ignite into a massive cloud of smoke and fire. The Camera then pans back to a bird's-eye view of the carnage...
...lead to disaster. But now the confidence is not quite so strong. Some economists see a frightening number of current parallels with the 1920s. Moreover, those similarities are compounded by unprecedented new debt burdens and serious questions about the financial system's stability. While the probability of a major crash may be only 1 in 100, says Lawrence Chimerine, chairman of Wharton Econometrics, he adds that "the risk of a depression is higher now than at any time since the 1930s...
...sure to occur within a few years. But economists generally believe any such slump would go no further than a difficult recession, rather than plunge into a full-blown depression. Reason: since the 1930s the U.S. has constructed a battery of economic and social safeguards. When the last crash struck, the U.S. lacked such backstops as bank-deposit insurance, unemployment compensation, food stamps, Social Security and Medicare. Says Economic Consultant Pierre Rinfret: "Could we have a crash a la 1929? The flat answer...
What would be a sufficiently frightening financial event to trigger such a crash? No one knows precisely. Panics are based largely on mass emotion rather than analysis, and the global economy has become so complex that economists cannot predict with certainty what combination of stresses and strains is required to produce a chain reaction. For example, no particular dollar figure for U.S. indebtedness will suddenly trigger alarm bells. Says David Colander, an economics professor at Middlebury College: "Our $8 trillion debt is almost an irrelevant figure. Technically this economy could support a $30 trillion debt as long as the people...
BUSINESS: Is America ripe for a crash? Some scholars see parallels to the 1920s...