We're in Another Great Depression? Really?

Allan H. Meltzer writes an editorial in The Wall Street Journal and asks what happened to the depression?

Remember just a few short months ago? Certainly not much more than 12 months ago. We had all kinds of dire messages:

• Michelle Caruso-Cabrera, a reporter at business news cable network CNBC, told viewers it was "one of the most historic weeks in financial and American history." (1)


• David Bullock, managing director of Advent Capital Management, an investment fund in New York, said, "We are closer to the Depression scenario than not." (2)


• David Stevenson at Money Week said it could be the end of capitalism (3).


• Paul Krugman from The New York Times wrote a book, saying "an increasingly out-of-control financial system set the United States and the world up for the greatest financial crisis since the 1930s." You can see the promotional web page here.


• The New York Times said this is a "recession poised to become the worst since the 1930s." (4)

The recession was seized by the Democrats as an excuse to spend money. They say it was necessary. However, the indicators are that we are coming out of the recession and the spending the government proposed hasn't even really taken hold yet. In fact, the French and German economies are bouncing back and they didn't even spend any money on stimulus (5).

The recession we are in is nowhere near the Great Depression of the 30s. Back then, we had 25% unemployment. Today, the worst areas have around 10-12%.

Meltzer's editorial can be found here.

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1. MacMillan, Robert (2008, September 18). "The Great Depression of 2008? Not Quite". Retuers.
Retrieved September 1, 2009, from Reuters

2. Story, Louise and Eric Dash (2008, July 15). "Confidence Ebbs for Bank Sector and Stocks Fall". The New York Times.
Retrieved September 1, 2009, from The New York Times

3. Stevenson, David (2008, July 14). "Why the Fannie and Freddie Means the Dollar Is Doomed". Money Week.
Retrieved September 1, 2009, from Money Week

4. Uchitelle, Louis (2009, January 9). "Jobless Rate Hits 7.2%, a 16-Year High". The New York Times.
Retrieved September 1, 2009, from The New York Times

5. "Old Europe Drifts Out of Recession First" (2009, August 13). Atlantic Review.
Retrieved September 1, 2009, from Atlantic Review