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OFFICIAL REPORT - Coming: Greatest Economic Crash Ever!
Plain Truth Magazine
September 1963
Volume: Vol XXVIII, No.9
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OFFICIAL REPORT - Coming: Greatest Economic Crash Ever!
Gene H Hogberg

The intoxicating "dance of the billions" can't last much longer. Another "Black Thursday" in less than a decade is predicted by top economists. Here are the startling facts behind our sick economy!

   THE ONCE-MIGHTY American dollar is in SERIOUS TROUBLE! Urgent measures are being taken, on the international level to protect the nation's vanishing gold reserves, now down to a 24-year low of less than $15.7 billion.
   For the very first time, the U.S. has appealed to the International Monetary Fund for help. "I never thought I'd see the day when the U.S. would be standing at the door," sighed one American official to the I.M.F. Internally, the country is floundering on a rising river of red ink. Total debt in the U.S. public, corporate and private is now over ONE TRILLION, 58 BILLION DOLLARS! That amounts to $23,260 for each average family of four! Can you afford that!?
   Such economic recklessness cannot go on forever!
   Top economists who are not afraid to endanger their own businesses are seriously warning the public to wake up to the alarming facts. A short while ago Dr. Arthur Upgren, professor of economics at Macalester College in St. Paul, Minnesota, startled a meeting of insurance men, bankers and educators when he said, "LOOK OUT FOR THE BIGGEST BUST YOU EVER SAW!"
   Dr. Upgren explained that only built-in "snubbers and stabilizers" are keeping our economy afloat and that by 1970 the U.S. will go fiat broke. By the end of that year, he said, liquid assets in banks will be reduced to 20 per cent of their liabilities about where it was in 1929.

Can't Learn from History

   "With two thousand years of European history before your eyes,
   Can you fathom how much 100 billion dollars really is?
   This staggering amount is equivalent to a stack of $1 bills 6,774 miles high, over four-fifths the diameter of the earth.
   $100 billion is the approximate amount of this year's Federal budget, ? of the Federal debt, and one tenth of the total U.S. public, corporate and private debt.
you (Americans) have repeated every one of Europe's mistakes," said the late Roman historian Theodore Mommsen. Two of the major reasons for the fall of Rome were the spiraling rise of taxes combined with extravagant spending, and the building of gigantic armaments.
   The very same mistakes are being made today!
   In addition, Americans have not only failed to learn from ancient history, they have forgotten their own recent history! "We can hope the country will do something in response to our warning," continued Prof. Upgren, "though the six deep financial collapses we had from 1873 to 1933 do not encourage us."
   Americans have not learned their lesson! Financial collapse NUMBER SEVEN God's number of finality will soon be here! And only God Almighty can save you and your family from ruin this time. How you can have supernatural protection we will see later.

Factors Obvious

   Just one cursory glance at our glittering, credit-bloated economy should reveal that something is drastically wrong! And when we look at all aspects of it mounting taxation, the mad spending for fantastically expensive and complex weapons, the crushing welfare and relief burden, the ballooning credit binge, the lurking danger of severe foreign competition, the constant hemorrhaging of our shrinking gold supply we see the explosive ingredients of a crash that will make the Great Depression of the 30's seem like an unpaid vacation.
   Let's analyze these factors briefly, one at a time. First, taxation. In the United States alone there are over 175,000 governmental bodies levying taxes and they seemingly can't get money fast enough! Federal expenditures alone have multiplied 25 TIMES in the last 30 years. The Federal debt has now reached the fantastic level of 304 billion dollars and another push upward looms. Each year $10 billion the largest single appropriation in the budget is earmarked just to pay interest on this amount. In 1929, before the stock market crash, the Federal debt was less than $20 billion. Do you see why the next crash is going to be far worse?
   Not only Federal, but state and local spending has climbed alarmingly. It now runs at four times the 1946 rate. Upwards of $50 billion a year is spent by these other governmental bodies an amount nearly 15 times the Federal budget for 1929.

Why So Much?

   Where is all this money going? Why do you have to work 2 hours a day just to pay taxes? Why are there over one thousand direct and indirect taxes on a single quart of milk?
   Let's look at the defense picture for one answer. Military spending in the U.S. has now reached a record "peacetime" rate of $56 billion a year, absorbing well over half of all Federal funds. And, get this shocker: High government officials are forecasting that if the arms race continues (which it will) the yearly defense outlay will reach 100 BILLION a year within a decade! Imagine! More than the entire Federal budget as it now stands!
   Few people realize the enormous amount of time, talent and energy, in addition to money, being devoted to the nation's military program. The Senate subcommittee on education recently heard administration witnesses testify that 75% of all scientists and skilled technicians working on research and development at the present time are doing it in the fields of space, missiles, atomic weapons and other military uses. Only 25% of America's research is devoted to peacetime activity. One scientist now working on new weapons said recently, "You ain't seen nothing yet" compared with what is planned in the way of new weapons (U.S. News & World Report, July 1, 1963).

Caught in a Vise

   The United States is now in the extremely awkward position where it can't afford to disarm. Whole corporations and industries are almost solely dependent upon military contracts. To try to reallocate the massive $56 billion defense outlay now would shake the economy right down to the ground.
   One reason Rome fell was that she built up a huge military machine to protect her from without while she suffocated from within on the stench of her own moral decay. The same is true of our society today. Weapons did not save Rome and they cannot save the United States, Great Britain or any nation today (Ps. 33:16). And neither can our rearmed, purchased allies save us nations upon whom we've lavished the appalling sum of $100 billion since the end of World War II. In fact, Bible prophecy says that despite our vast military preparedness, it will all be to absolutely no avail. God will not fight with us in the next war as He has in the past. He says to our people, the descendants of ancient Israel: "An end, the end is come upon the four corners of the land... They have blown the trumpet, even to make all ready; BUT NONE GOETH TO THE BATTLE: for MY WRATH is upon all the multitude thereof" (Ezek. 7:2, 14). Not one missile will be fired, not one plane will be sent aloft, not one nuclear sub will sneak out of port!

Crushing Welfare Load

   Welfare programs designed to give everybody "security" have also burgeoned into a mountainous monetary headache. Cost of these programs old-age survivors and disability pensions, relief, unemployment benefits skyrocketed from $6.9 billion in 1953 to over 20 billion in 1961. Welfare now absorbs about 20 cents of every dollar the Government spends. Year after year more and more people are tucked under the welfare blanket. WHO IS GOING TO PAY FOR ALL OF THIS?
   Relief costs alone are threatening to overwhelm strained coffers of some cities and states where chronic unemployment persists. Thirty-two states already have set up state income taxes to help meet rising costs. Even so, the picture continues to worsen. In 1946, 47 of the (then) 48 states operated within their incomes. By 1958, 32 states were spending more than they were collecting.
   Now perhaps you can realize why you, the average American working man or woman, have to work 2 hours a day just to earn enough to pay all of your taxes.
   "Historically, whenever any nation has taxed its people more than 25% of their income, that nation has... headed for economic decay," reported noted news analyst Paul Harvey back in 1958. "Already our taxes are devouring more than a third [now upwards of 35%] of every income dollar."
   No nation can take this type of financial beating for more than a few short years!

Private Debt Enormous

   Instead of being shocked at the fiscal folly of his elected officials, the average John Q. Public has committed the same mistakes in his own personal life. With his lust for material goods easily satisfied via the credit card, the charge-a-plate and the "friendly" loan, he and 100,000,000 other Americans are wallowing in the midst of a glittering buy-now, pay (or repossess) later binge unparalleled in the nation's history.
   "Consumer credit the key to the rise in private debt has increased over 550 per cent since 1940. In the last 10 years it has more than doubled" (Buy Now, Pay Later, by Hillel Black). By 1970, experts predict consumer credit will total $107 billion, nearly double the present $56 billion.
   The situation has become so outrageous in "prosperous" America that a person is almost considered a traitor to the nation if he is not up to his neck in debt. Without the huge debtor class, "the nation's great industries would slow to a crawl, and the price of almost everything would soar" (Newsweek, January 8, 1962).
   Do you know what the immediate effect would be if Americans no longer bought automobiles on time? "First of all, there would be at least a 50 per cent reduction in the number of cars manufactured. In turn, this would mean America would produce 8 per cent less steel, 24 per cent less malleable iron... and 31 per cent less synthetic rubber.
   "In terms of jobs it could mean unemployment for 370,000 wage-earners who make motor vehicles and parts. The work force of 2,000,000 people engaged in automotive sales and servicing might be cut by a third. Probably 100,000 petroleum workers would no longer have jobs. [All totaled, the number of unemployed from this one major cutback could reach over 1,100,000!] Finally, the havoc that would result in our economy in general would make any of the post Second World War recessions appear as years of almost unbounded prosperity" (Buy Now, Pay Later).
   Just as in the case of the overstuffed defense industry, we can't put up with the Great American Debtor much longer but we can't do without him. What a dilemma!
   This great "pillar" of the American economy is already beginning to crumble under its crushing burden. "During the fiscal year of 1959 nearly 89,000 families failed financially, a 300 per cent increase over the last decade and MORE THAN THE TOTAL NUMBER OF BANKRUPTCIES [personal plus business] FILED DURING THE HEIGHT OF THE DEPRESSION OF THE THIRTIES" (Buy Now, Pay Later).
   It can't go on much longer!

Threat from Without

   As if these overawing internal problems were not enough, America now faces the prospect of an ugly trade war with our bought-and-paid-for "allies" in Europe. The beginning skirmishes have already been fought with the U.S. the loser. Many industries have already felt the pressure from foreign competition steel, hand and machine tools, heavy machinery, clothing and sporting goods to name but a few.
   The profit squeeze in business due in large part to industry's desire to hold down prices on internationally competitive goods has reduced the profit margins of the nation's leading 100 corporations 20 per cent in the last decade.
   If you are a chicken farmer, you know first-hand what is happening to your export market in Europe. 70% of U.S. poultry exports to the Common Market have been whacked off just in the last year, shut out by a rising tariff wall. The entire $1.1 billion agricultural market in Europe is in danger! The loss of this farm market, reported Senator George D. Aiken of Vermont, could be enough in itself to trigger a depression.

"Later Than We Think"

   In a very sobering dispatch from Washington this past May, news analyst Andrew Tully reported: "The time is later than most Americans think. AMERICAN BUSINESS... ALREADY HAS STARTED TO FIGHT FOR ITS LIFE against European competition...
   "The individual worker will have to forsake a wage boost here, the manufacturer an extra profit there. (But who is willing to take the first healthy slice?)
   "It will be a painful time for almost everybody. But it is going to have to be faced because THERE IS NO ALTERNATIVE EXCEPT A MASSIVE DEPRESSION."

Exit the Dollar

   It is no wonder, after all that we have seen, that the once-impregnable dollar is in such a shaky position, coming under suspicion throughout the free world.
   About 70 foreign countries are keeping gold in numbered cages 85 feet below street level in the Federal Reserve vault in New York City. Each week a few millions more worth of gold bullion is transferred there from the U.S. Assay Office five blocks away a constant, steady hemorrhage of our economic lifeblood!
   Moreover, not one red cent of the remaining 15.7 billion is really America's, either. Foreign claims against U.S. gold now total 23 billion! There is practically no latitude of movement, should our creditors put on the pressure!
   Will this happen? Will the screws ever be tightened? How long will confidence in the plummeting dollar remain? Notice this alarming quote from Warren W. Butler, publisher of the Lakewood, California, HERALD-AMERICAN. On May 23, 1963 he wrote:
   "The position we have enjoyed since World War I, more than 45 years ago, as the leading financial power of the world has evaporated... Today control of world finance is on the continent of Europe. The Yankee dollar is under an ominous cloud. European central banks in such countries as France, West Germany, Switzerland and Italy are now calling the financial shots in the Free World; it is becoming more evident as each day passes. The American dollar has gotten into the position where their sympathy and consideration is essential to its survival in world trade..."
   Imagine! Once-mighty America now finds herself in economic subjection to nations who lay prostrate at her feet just 18 short years ago!
   "These banks have been patient for only one reason," continued Mr. Butler. "They know that if they tightened up on our credit without some real financial reforms within the United States at the same time the resulting crash in this country would dwarf what occurred in 1929 and would be so great that it would engulf them all.
   "It's about time that we put the brakes on the government hand-out, both within our country and on an international scale... We must begin to put our house in order or the European central banks will be forced to begin closing in on us... for their own protection from the chaos of COMPLETE FISCAL BANKRUPTCY."

No Way of Escape!

   The tragic thing is that the nation as a whole is not showing any indication of correcting itself. Instead, signs point to more taxes, increased spending, bigger bombs, deeper debt, more competition and a continued loss of gold all culminating in a fantastic wash-out. You, however, can escape this impending peril, if you will put your house in order. You need not suffer the punishment God is allowing to fall upon our heedless peoples, who have rejected every right way of His and have sunk into the mire of materialistic depravity.
   Just before the 1929 crash, those who saw what was coming were able to juggle their finances and weather the storm. When the final depression comes, NO amount of financial "wheeling and dealing" will help. No businesses, no corporations, no banks (even with "deposit insurance") are going to limp past the "Big Bust," as many did after "Black Thursday."
   No hoard of salted-away "greenbacks" is going to save anyone either. With all the gold gone, a dollar bill will be as worthless as a moldy rag. "On the day of God's anger, WEALTH IS OF NO AVAIL: goodness [obedience to God's laws] alone saves man from death... He who relies on his wealth shall wither" (Prov. 11:4, 28, Moffat translation).
   God prophesies of our people: 'They shall cast their silver in the streets [money will be worthless] and THEIR GOLD SHALL BE REMOVED: their silver and their gold shall not be able to deliver them in the day of the wrath of the Lord; they shall not satisfy their souls, neither fill their bowels: [you can't eat money or credit] because it [money, the lust for material things] is the stumbling block of their iniquity" (Ezek. 7:19).
   God is our Rock, our Refuge. Obedience to Him and reliance upon His protection is the only answer!
   One reason that this nation is in such dire economic straits is that our people have not followed the immutable financial laws that God has set in motion for our own good. In Malachi, the third chapter, God thunders to modern-day Jacob or Israel our English-speaking lands today "Will a man rob God? Yet ye have robbed me. But ye say, Wherein have we robbed thee? In tithes and offerings. Ye are cursed with a curse: for ye have robbed me, even this whole nation" (verses 8, 9).
   If our people had obeyed even this one law, the nation wouldn't be in such trouble.

Protection Offered to YOU

   Even if the nation as a whole won't repent, you as an individual can repent of your disobedience against your Creator. Read Ezekiel 18:21-23. God gets no pleasure in seeing you suffer. Also, you need to get in harmony with God's financial laws. When you do, you will come to know God, that He is real, that He blesses those who put their trust in Him, who make Him the Super quadrillionaire of the Universe their financial partner. To discover in detail what these financial principles of God are, read Mr. Armstrong's free booklet, Ending Your Financial Worries, and also the article, "How to Get Out of Debt."
   By seeking first the Kingdom of God and His righteousness (Matt. 6:33), by serving God, not mammon (money and the things money will buy, which will soon perish), your heart will be increasingly centered in the work of God and His coming Kingdom the only things of concrete, lasting value in the turbulent years ahead. "For where your treasure is, there will your heart be also" (Matt. 6:21). You will be laying up real treasure in heaven where no, "crash" is going to wipe out its value.
   The soundest investment for your dollar today? GOD! "Bring ye all the tithes into the storehouse, that there may be meat in mine house, and prove me now herewith, saith the Lord of hosts, if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it" (Mal. 3:10).
   Take God up on His challenge!
   "Because thou hast kept the word of my patience, I also will keep thee from the hour of temptation (tribulation) which shall come upon all the world, to try them that dwell upon the earth" (Rev. 3:10).
   Yes, you can have supernatural PROTECTION when the "Big Bust" comes!

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Plain Truth MagazineSeptember 1963Vol XXVIII, No.9
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