From the President's Desk Great Depression

Ominous Headline – Fact or Fiction?

By Alan Beaulieu on February 14, 2023

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Alan Beaulieu

With a reputation as an accurate, straightforward economist, Alan Beaulieu has been delivering award-winning workshops and economic analysis seminars across the world to thousands of business executives for the last 30 years.

Headlines are meant to grab a potential reader’s attention, and this one certainly grabbed mine! A major news source led with this:

“GDP Report reveals ominous Great Depression warning sign not seen since 1932.”

The article went on to state that the GDP report shows that “Real Disposable Income has fallen off a cliff.” Specifically, the article stated that the drop in Real Disposable Income (DPI)1 is “the most troubling information in the report” and that in 2022 there was a $1 trillion drop, the “second-largest percentage drop in real disposable income ever, behind only 1932, the worst year of the Great Depression.”

This article was of course a “must read” given all our work over the years on the coming 2030s Great Depression. ITR Economics has dedicated a lot of time and energy to helping people and businesses prepare for the coming depression. Fortunately, the premise for the hysteria in this particular piece was easily debunked.

The Facts

The US Bureau of Economic Analysis is the source of the following values for DPI, stated in trillions of dollars, using the quarterly data since this is a seasonally adjusted annualized rate series.

Dec 2021 $15.537
Jun 2022 $15.022 – the lowest value in 31 months and essentially the end of a 15-month decline.
Dec 2022 $15.181


I do not know what source the article utilized, but the BEA data showed that DPI was rising in the second half of 2022 and that the year ended with DPI down $357 billion, a long way from $1 trillion. Perhaps more encouraging is that Real Disposable Income was rising, a point the article failed to mention. That rise means that after-tax income was moving higher despite inflation, which is great news for the economy. That trend is wholly consistent with our projection of decelerating rise in the US economy as we traverse 2023, not of an imminent Great Depression.

So why was the DPI level declining at all? Because income trends are normalizing from the stimulus-fed sugar high that stemmed from COVID. The decline is another example of a COVID-echo. It was expected and not hard to understand. The surge in income and subsequent drop are part of the “Peloton” effect, which we have discussed in our numerous presentations. One-off purchase items such as Pelotons went into a hole, as did aspects of household and patio furniture – items that would not be subject to repeat purchases by the same person year after year.

Make no mistake about it: there is a depression coming in approximately seven short years. However, that means there is time to prepare our personal finances and businesses for what is ahead. Please visit our website for more information on the coming Great Depression and how you can prepare for it. There is still time for you to get ready.


1Real Disposable Income is defined as total after-tax income received by persons in the US, including transfer payments, adjusted for inflation. It is the income available to persons for spending, investing, giving away, or saving.

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