ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / NEWS

TikToker Suggests America has Silently Slipped Into Economic Depression; He may Have a Point

Freddie Smith's TikTok video comparing present-day America to the Great Depression goes viral, highlighting stark cost-of-living differences.
PUBLISHED JAN 15, 2024
TikTok | fmsmith319
TikTok | fmsmith319
TikTok |
TikTok | fmsmith319

From lifestyle choices to healthcare and politics to personal finance, TikTok has become a digital ecosystem for millennials and Gen Z to discuss most things that make a difference in everyday life. Now a viral TikTok video by influencer Freddie Smith, a real estate agent from Orlando, Florida, has ignited a social media debate, as he draws parallels between the economic conditions of present-day America and the state of the country during the Great Depression of the 1930s. Despite seemingly positive economic indicators like low unemployment and robust GDP growth, Smith argues that there is an underlying issue causing a "silent depression."

Smith has based his comparison on the stark differences in the cost of living between the two eras. During the Great Depression, the average home cost $3,900, a car was $600, and monthly rent was $18. Fast forward to 2023, and the average home is $436,000, a car is $48,000, and the average rent is $2,000 per month. Smith contends that while the average income today has also gone up to $56,000, the cost of living has dramatically outpaced income growth, creating an economic disparity.

Examining the ratio of housing costs, car expenses, and rent to average income, Smith highlights that these essential components have become increasingly unaffordable for the average American. The average home, which was three times the average salary during the Great Depression, is now eight times the average salary. Similarly, the car, which was 46% of the salary back then, is now 85% of the salary. Most strikingly, rent, which used to be 16% of the average salary, has surged to 42% today.

https://finance.yahoo.com/news/were-silent-depression-tiktoker-went-114500783.html
https://finance.yahoo.com/news/were-silent-depression-tiktoker-went-114500783.html

Smith's TikTok video has resonated with users, accumulating 8.7 million views and over 781,000 likes. Many users agreed with his assessment, considering the growing financial challenges faced by ordinary Americans. The disparity between income and living costs has become a focal point of discussions on social media platforms.

While Smith's analysis of economic trends raises concerns, it's also crucial to note the distinctions between the current scenario and the Great Depression. Today's America does not grapple with the severe unemployment rates witnessed in the 1930s. According to the latest jobs report, nonfarm payrolls increased by 150,000 in October 2023, with an unemployment rate of 3.9%. Unlike the Great Depression, which was triggered by a catastrophic stock market crash, the present-day investment climate appears stable. The Dow Jones Industrial Average has experienced a 9% climb in 2023 and an impressive 48% increase over the past five years. This stands in stark contrast to the historic market collapse that marked the onset of the Great Depression.

The contraction in economic output that defined the Great Depression is absent in today’s economy. From 1929 to 1933, real GDP in the U.S. fell by 29%, while the Commerce Department's recent estimate indicates a 5.2% annual increase in real GDP in the third quarter of 2023.

While Freddie Smith's TikTok video has sparked conversations about economic challenges in America, experts caution against directly equating the present with the Great Depression. While income disparities and affordability issues are real concerns, key economic indicators suggest a more nuanced view of the current economic landscape.

MORE ON MARKET REALIST
Fans complained that the unusual clue cost the player a chance to challenge for the win.
19 hours ago
The founders of xCraft struck a rare and expensive all investor deal on Shark Tank.
23 hours ago
The dynamic host finally broke silence on exit rumours, cementing his intent to continue his job.
1 day ago
The painting and a note from the renowned artist, Hovsep Pushman left the expert in awe.
1 day ago
Banking on a bad guess made by his opponent, Ryan Burkett guessed the correct answer and took home a massive win.
1 day ago
The World War II era sketch was given to the guest's father by Jerry Siegel and Joe Shuster, the creators of Superman.
2 days ago
The contestant, Madison, hit the jackpot with less than a second remaining in the 'Race Game.'
2 days ago
Both the contestant and fans believed he stood no real chance of solving the Bonus Round puzzle.
3 days ago
The spooky item was a great find for the pawn shop, but the asking price was too high for Corey Harrison to cut a deal.
4 days ago
Despite saying that the item was worth a small fortune, the expert was confident about its future.
4 days ago
Harrison almost blew the deal for the gold & diamond encrusted ring over $3,000.
5 days ago
Insulted by her refusal to partner up, Kevin O'Leary told Lori Greiner, 'Do not screw with Mr Wonderful...'
5 days ago
The witty host reminded everyone that he’s never afraid to deliver the perfect clap back.
6 days ago
TikToker Madilynn Cameron alleged she was asked her to get a membership to use the self checkout facility at Walmart.
6 days ago
The toy train set from the Lionel company turned out to be a invaluable treasure.
6 days ago
The pawn shop boss, Rick Harrison wasted no time to get the mummy authenticated.
6 days ago
The elderly guest was visibly shaken to learn the value of her prized family heirloom.
6 days ago
In an Instagram post, Drew Goldfarb got candid about his big win, friends he made along the way, and things he learnt.
7 days ago
Ken Jennings accidentally let a curse slip and spoiled a clue — and the goof-up made it to air unedited.
7 days ago
The expert admitted that the item wasn't the most appealing thing to appraise.
7 days ago