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Side-By-Side with the Depression

By experts and staff

Published
  • Benn SteilCFR Expert
    Senior Fellow and Director of International Economics
  • Dinah Walker
    Analyst, Geoeconomics

The current downturn is now sharper than most post-war recessions. Comparisons with the depression are rising, but there are important differences too. The policy response has been quicker this time. The federal budget deficit has expanded much more quickly than during the Depression, reflecting government bailouts and stimulus. In the current downturn, it took only about 12 months for the U.S. budget deficit to decline by more than 5%, while during the Depression it took nearly three years to do so. The hope is that bold government action can prevent a rerun of the 1930s.

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