The Thirties a Decade of Despair: The Great Depression and The Great Recession

The Great Depression and The Great Recession were two economic events in which the economy spiraled downwards.  “There is an old joke among economists that states: A recession is when your neighbor loses his job. A depression is when you lose your job.” (Mike M. [2013] Recession? Depression? What’s the Difference?)  I believe this joke is rather accurate as it shows the effect of each event.  When a recession occurs people around you begin to lose a job and thus it seems like a distant event that may or may not affect you.  While a depression, strips you of your job and thus becomes a more apparent occurrence.

In the case of The Great Depression, it stripped many people of their jobs and left thousands starving.  One of the key causes of The Great Depression was overproduction.  Business owners were mass producing large amounts of their products however, when they failed to sell quickly the owners began to stockpile them.  Thus, the business owners would have to slow down production and in doing so reduce the number of jobs ( (Falk, Plante, Miller, Fiqueira, 2006.)  The more recent Recession however, was much less severe and mainly due to an unbalanced economic system. As well, an economic class gap was partly to blame as well. (John, R. 2010)  While those of the upper class got to revel in their prosperity those belonging to the middle and lower class were struggling with lay offs.

However, if you compare the Depression to the Recession the similar cause of these events would be the Government’s (of both eras) massive spending.  Both Government’s stated that they would enact a budget but ended up spending vast amounts of money on Federal Projects.  Projects that would “supposedly” ease the strain on the economy. (Labonte, M. 2010)  Due to the Government’s money hemorrhaging in the Recession period, valuable funds were being spent on quick fixes to job shortages rather than permanent solutions (John, R. 2010.)  I believe this may apply to the Depression as well since the government of that time appeared to be squandering money in an attempt to find a solution as well.

Recession vs. Depression [Photograph; Economic Recession.] At: http://www.buzzle.com/articles/recession-vs-depression.html (Accessed on 11.28.13)

 

References:

J.A. Falk, Yvette P. , Jorda M. & Mark F. (2010).  Social Studies Eleven Student Workbook. Hazelmere Publishing  Surrey, British Columbia

John R. (2010, June 8). The Real Cause of the Crash of 2008. Retrieved from: http://www.esquire.com/blogs/politics/2008-recession-causes-060810

Labonte M. (2010, Oct. 6). The 2007-2009 Recession: Similarities to and Differences from the Past. Congressional Research Service. Retrieved from:http://www.fas.org/sgp/crs/misc/R40198.pdf

Mike, M. (2013). Recession? Depression? What’s the Difference?  Retrieved from: http://economics.about.com/cs/businesscycles/a/depressions.htm

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s