I guess the question should be "is this recession similar to what they were prior to the great depression"

Question

I guess the question should be "is this recession similar to what they were prior to the great depression"

Answer 1

You can not eat money, gold, silver, or diamonds. If for any reason there were catastrophic crop failures all over the world... money would be worthless, because there would be nothing to eat...People would have money but no food to buy. The great depression was something caused by events that were superficial.  This may sound like something out of a science fiction movie.

Answer 2

Yes it similar and I believe we could be heading that way again. The Fed was a major contributor by a loose monetary policy in the 20's creating an artificial boom and then in 1928 they began to tighten the money supply which caused a downturn and the recession started in Aug. 1929. That is very similar to today's Fed policy, they held rates low for several years and began to tighten it last year and now they have loosened it again. This time they are not just bailing out banks they are bailing out brokerage firms, which are FDIC, at taxpayer expense.

FDR's policy, when he took over only exacerbated the problem which had been recovering. He had raised taxes 3 times higher by 1939 which took capitol out of the market. The increased and ever changing regulation on businesses kept people from investing in an insecure environment. We are now looking at a Democrat controlled Congress that promises to raise taxes by letting the breaks expire starting next year. They are also promising new and greater spending from the government which takes money away from the people and market and puts it into the hands of an inefficient bureaucracy.

This time it might be worse because of the percentage of Americans in debt is much greater than in the 1930's. Our national debt is also much greater and with the threat of OPEC dumping the dollar, there will be no reason for countries to hold our dollar (buy our debt). We have already been experiencing major inflation with our currency counter to what the "official" inflation rate states. There are already places in Europe that will no longer accept dollars as payment.

Only time will tell.

Answer 3

No, not really. The Great Depression was a rapid switch from one economic extreme to the other. Black Tuesday, October 29,th 1929 marked the turn from great to awful. Before the Great Depression, inflation was absolutely out of control. Not the case with this one.

Our economy was doing fairly good in the 90s, but things have been slowing down at a gentle pace. Our economy just isn't growing as fast as it has been, gas prices and food prices are rising, but none of this has been really sudden.

The graph below illustrates just how quickly things went south.

The fact that there's been time to debate whether this recession is actually a "recession" highlights the fact that the recent economic downturn has been a slow one.

Answer 4

The current recession (which no-one will refer to as a recession, but an "economic slowdown") is very similar to the Great Depression with one key difference - the Fed is bailing us out.

In the Great Depression, the Federal Govn't wouldn't bail the banks out, but now it will.

So this recession will NOT turn out to be as bad as the Great Depression.

Answer 5

I dont know, but even if it was, I assume what your stabbing at is the possibility of this becoming a similar event.

It cannot become a depression on the same scale because of regulations and agencies put in place to do nothing but ensure that it doesnt happen again. FDR had several steps in his new deal, one of which was lasting preventions put in place.

Could it become bad? Sure. Could it be ANYTHING close to the great depression? I dont think its remotely possible.