79% Say Economy Could Collapse According to Fox News Poll
We are currently about a year and a half removed from the darkest days of the economic meltdown of 2008.
In the fall of 2008, the unimaginable nearly took place - the US economy (and, by extension, the global economy) very nearly collapsed.
People can argue about the reasons for the near-meltdown, as well as whether or not the medicine delivered to the economy by the likes of Paulson, Geithner and Bernanke was appropriate.
What can't be argued, however, is that the United States very narrowly avoided another Depression (that's Depression with a capital D) by the narrowest of margins. If not for some unprecedented government intervention, the entire banking system would have collapsed and the US economy would have been ruined nearly overnight.
People usually have short memories when it comes to recessions and market downturns, but this time was different. This was no ordinary recession, and the cautiousness that was inspired by the "Great Recession" will likely stay with the generations that lived through it for years to come. Our grandparents lived through the Great Depression and were permanently changed as a result - this past economic downturn wasn't as bad, but it will certainly continue to haunt many nonetheless.
The first sign of this phenomenon? According to a recently conducted Fox News poll, 79% of those surveyed said that they believe that the economy could collapse.
This is a shockingly high number, especially given the traditionally optimistic view that many Americans have about the US economy. In the past, it was always OTHER economies that stood a chance of collapsing, but certainly not the US economy. A few years ago, the notion of a potential collapse of the smoothly running US super-economy would have been laughable to most.
However, things began to change on December 2007 when the economy started to slip into a recession. Things REALLY changed in the fall of 2008, when companies such as Lehman Brothers and AIG started to collapse, and the US government was forced to leap into action. Suddenly the previously untouchable US economy, the pride of every American, was on the ropes and in very real danger of going under.
According to the Fox News poll, just 18% of those surveyed believe that the US economy is "so big and strong it could never collapse". I'm wondering what this number would have been in the fall of 2007? 70%? 80%? Even higher? Given how close the US economy did come to collapsing, I find it hard to believe that even 18% of people would find a collapse impossible to contemplate.
What does it mean if 79% of people believe that the economy could collapse? It likely means that people (and businesses) will continue to save instead of spend. As much as the government wants people to return to their free-spending ways of pre-2008, it likely won't happen anytime soon. Paying off debt and building up savings accounts is certainly a positive thing for the financial well-being of the average US citizen, but it will also serve to keep a lid on the economy, much like Japan in the 1990s and 2000s.
The simple fact is that the "Great Recession" has shaken many Americans down to their core, and it will take a lot more than a few quarters of economic growth before people begin to forget.
Source: Foxnews.com - Fox News Poll: 79% Say U.S. Economy Could Collapse
Filed under: The Economic Meltdown