Did The Great Recession Bring Back The 1930s?
Even though both events were momentous enough to earn the word "great" as a modifier, they really are not comparable, according to recent research by economist Mark Vaughan, a fellow at the Weidenbaum Center on the Economy at Washington University in St. Louis.
"It's now clear the Great Recession was the worst downturn of our lifetime — the worst since the Great Depression," Vaughan said. "But in terms of human suffering, it pales in magnitude" with the 1930s.
The Great Depression was painful in ways we can scarcely imagine now because we have grown so accustomed to having a government-funded safety net, he said.
For example, the unemployment rate hit a peak of 10 percent in October 2009, but Congress provided those laid-off workers with extended unemployment benefits. As a result, jobless Americans were able to collect up to 99 weeks of government checks to help ride out tough times.
In contrast, the jobless rate shot to 25 percent in the Great Depression and stayed in the double digits for a decade. When the job market first collapsed in 1930, workers could not rely upon unemployment insurance, food stamps, Social Security or other forms of government help, Vaughan noted.