Economic Collapse

The economy is on a sliding scale depicting how well or poorly it’s doing. On the not-doing-so-hot half of the scale, we have “recessions” in the middle (so, at the third-quartile, you could say). Further down—when economic recessions are really bad—we call them “economic collapses.” On the edge, we have societal collapse, but nobody likes to talk about that.

How do you know an economic collapse when you see one? When the economy tanked so bad that it’s in the gutter for years...or decades...paired with a side of civil unrest (like street riots, strikes, peaceful protests, or not-so-peaceful protests) and salted with increased poverty. Not the kind of meal we want to be eating.

Why does this happen? Financial markets crashing down onto us is a common one, but so is hyperinflation (when inflation goes crayyyy) and stagflation (when, counterintuitively, the economy is doing badly, unemployment is high, and yet prices are still rising). While the Great Recession of ‘07-’09 was pretty bad, it wasn’t Great-Depression-bad (24% unemployment, 25% of GDP went poof).