What Goes Around Comes Around: Lessons from the Great Depression

Photo (cc) by woodleywonderworks

This is an op-ed I recently wrote that will soon appear in the Atlanta Journal Constitution. Read it, and if you like it, share it!

These are dark days, particularly for Georgia residents. Georgia’s personal bankruptcy rate is the third-highest in the nation with one in 50 households declaring bankruptcy last year. Experts say that high unemployment and a sagging real estate market have contributed to the state’s financial woes, but Georgia has held a high rank in personal bankruptcies for years, long before this Great Recession.

How did we get here and what can we learn from it? We should start by looking to the past.

Originally named “The GI Generation,” Tom Brokaw rightfully renamed Americans born between 1900 and 1924 “The Greatest Generation.” They faced unprecedented social, geopolitical and economic challenges, yet emerged the most prosperous generation. They were raised in the Great Depression, when bank failures numbered in the hundreds and insured savings didn’t exist. The unemployment rate was 25% and unemployment compensation didn’t exist. Then, just as the economic depression was winding down, the men were called to fight in a war that ultimately killed 50 million people. Many of the women were forced to discard the role of homemaker to become factory workers.

While our problems today seem severe, they pale in comparison to those faced and overcome by The Greatest Generation. It’s worth it to try to understand the values and actions behind their success.

The Greatest Generation reached adulthood in a time when life wasn’t fair. They learned that hard work and loyalty to your company doesn’t mean your employer will remain loyal to you. Even if you pay your debts for years, the instant you stop you’ll lose everything as quickly as lenders can legally seize it. When you get too old or sick to take care of yourself, your only hopes are family and friends.

The Greatest Generation did two things to overcome their obstacles: one on a personal level, the other on a national one. Personally, they become self-reliant. They learned to depend only on themselves, and understood that taking on debt meant taking on risk and thus was only for extraordinary circumstances. They lived below their means and never were without an emergency cushion. For this generation, making the sacrifices necessary to achieve security didn’t require much discipline, because for them, avoiding debt meant survival.

The second thing the Greatest Generation did to overcome adversity was to change society. They created agencies to insure bank deposits, establish social security and create unemployment compensation. They supported labor unions that allowed workers to negotiate a higher standard of living. They passed laws to keep Wall Street bankers from accumulating so much power that the greed of few could result in the suffering of many. By harnessing both individual discipline and societal safeguards, the Greatest Generation succeeded in not only protecting future generations, they became the wealthiest generation to ever live. The irony is that the sense of entitlement they left to future generations led to today’s problems.

The Baby Boomers (born between 1946 and 1964) grew up with virtually none of the obstacles faced by their parents. This generation got what it wanted. Their parents made education a priority so they went to college. Their parents had the discipline to create a nest-egg so they inherited. Their parents created social security so they had a shot at a comfortable retirement. Their parents supported labor unions so they could look forward to employer-sponsored healthcare, a fair wage and a company pension. They grew up with every comfort and convenience, from their own bedroom to their own car.

In short, they were spoiled and, as a result, felt entitled. They never learned that life could be unfair because it wasn’t. This was the first generation that learned to use credit cards, concerning themselves not with cost, but the size of the monthly payments. The first generation to believe owning a house was a right, not a privilege. For Baby Boomers debt wasn’t something to be avoided; it was a perfectly acceptable way of having the things you wanted today by paying for them tomorrow.

Then came the Gen-Xers, born between 1965 and 1979. This generation not only had no fear of debt, they embraced it. This is the generation that had credit cards on campus, able to borrow without even having a job. They couldn’t imagine a life where one waited until they could afford to pay cash for a car, a house, even clothes.

Then came the Millennials, born between 1980 and 2000. This generation faces economic conditions that resemble those of their great-grandparents. Life, once again, isn’t fair. The powerful few once again have destroyed the life savings of many. Company pensions are rare, health insurance is a luxury and the minimum wage is barely enough feed the family pet. Companies, even churches, file bankruptcy to avoid financial obligations. This generation won’t ever see a Social Security check. They have no loyalty to the boss because they know that the boss, if necesary, will send their job overseas to stay competitive. A secondary education is no longer a birthright; it’s now a decision of economic rather than intellectual ability. Even something as formerly predictable as price appreciation of a home is uncertain. The credit they were raised to believe could be counted on to finance their middle-class lifestyle is no longer available.

The solution for their future is to look to the past and follow their Greatest Generation predecessors. They can become self-reliant. They can avoid debt and live below their means. They can put their trust in family and friends rather than institutions. They can create a value system that rewards thrift and eschews conspicuous consumption. They can focus on happiness instead of possessions, and security over status. They can achieve greater control of their financial futures by becoming more entrepreneurial and less dependent on a boss. By doing these things, they’ll create a society like the one forged by the Greatest Generation: one better equipped to take care of themselves and generations to come.

That’s the way I see it. How about you? Leave me a comment below. And if you like my philosophy, you might also like my latest book, Life or Debt 2010.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
The 10 Worst Types of Tickets for Your Car Insurance Rate
The 10 Worst Types of Tickets for Your Car Insurance Rate

Some types of traffic violations can drive your car insurance rate more than 25% higher.

This Is the Best Online Savings Account for 2021
This Is the Best Online Savings Account for 2021

The rate of return is just one of several reasons this account stands out.

15 Free Streaming Services to Watch While Stuck at Home
15 Free Streaming Services to Watch While Stuck at Home

These free movie streaming sites offer thousands of movies and TV shows, including recent releases and beloved classics. If you love free movies, online sites are where you need to look for the best list of features that are just one easy click away.

7 Tips for Building an Emergency Food Supply
7 Tips for Building an Emergency Food Supply

A pandemic or natural disaster could leave you reliant on your existing emergency food supply. Is your pantry well-prepared for emergencies? Knowing what to stock up on for emergencies can be a difficult task and we’re here to help.

16 Products That Solve Everyday Annoyances
16 Products That Solve Everyday Annoyances

These items put an end to the daily irritations that bug you the most.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

This iconic dinnerware is prized for everyday use as well as reselling for profit.

Medicare Will Not Cover These 6 Medical Costs
Medicare Will Not Cover These 6 Medical Costs

Don’t let these health care expenses catch you off guard in retirement.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

Beware This Hidden Ingredient in Rotisserie Chicken
Beware This Hidden Ingredient in Rotisserie Chicken

Something foul may lurk in those delicious, ready-to-eat birds.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

5 States With the Worst Health Care for Retirees
5 States With the Worst Health Care for Retirees

All of these states are located in the same region of the nation.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

12 Deep Discounts Available on Amazon This Friday
12 Deep Discounts Available on Amazon This Friday

These items are steeply discounted — but the deals won’t last long.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

7 Big Purchases You Should Never Make
7 Big Purchases You Should Never Make

Sometimes a big-ticket purchase is nothing more than a big waste of money.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.