What Are The Similarities Between The Great Depression And Recession

Two of the worse economic times in America’s history are the Great Depression and the

Recession of 2007. However, how do these great events compare? Are they equally as destructive or is one worse than the other? During both of these events, America’s unemployment rates were very high, inflation was drastically increased, and overall economy was unbalanced. The results included the extreme increase in homeless citizens, business foreclosures, and destabilization of former monetary and fiscal policies. Due to these facts, both of these major financial disasters are considered to be very similar. Although, the Great

Depression and Recession were very similar, they were exceedingly different due to their time periods and causes. This difference

Due to the high demand for jobs and food, soup kitchens and job summits would have enormous lines that were described as stretching as far as the eye can see. Due to the hardships of the people and America’s economy as a whole, the government took action when Franklin Delano Roosevelt became president. During his first inaugural address, President Roosevelt described the situation "The withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone. More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return."(Hardman, John).

Aware of the many issues of the economy, President Roosevelt established the New Deal which consisted of several job and welfare programs. The New Deal’s programs and organizations focused on several different areas to be improved within the economy such as unemployment.

Some notable programs and organizations in the New Deal include CCC(Civilian Conservation

Camps) and the Civil Works Administration. Both of these organizations focused on

These times of economic distress are very similar in several ways. They both caused a drastic increase in the unemployment rates. They were both preceded by good economic times.

Both of them were preceded by innovations in customer finance. Also, both troughs were preceded by the movement of banks into a new business line and asset bubbles. Due to these similarities, it can certainly be ascertained that these times of economic crisis were very alike.

Despite the similarities of their beginnings, the Great Depression was far more oppressive and substantial. The unemployment rate in the Great Depression was 25% while it was 8.5% in the

Recession. The state response in the Great Depression was raising taxes and cutting spending while the Federal plans provided fiscal relief to states to lessen impact of tax increases during the

Recession. The increase in the money supply for the Federal Reserve was 17% during the Great

Depression, but 125% in the Recession. The percentage of bank failures during the Great

Depression was 50% while it was 0.6% during the Recession. As for the overall comparison of the Recession and Great Depression David Goldman stated, “Comparisons between