The economy is bad, but it’s not as bad as it was during the Great Depression, says Christina Romer, an advisor to the Obama administration and an established scholar of the Great Depression (“It’s Not the Depression, Top Obama Advisor Says,” San Francisco Chronicle, March 10, 2009).

Romer, an economist and chairwoman of the president’s Council of Economic Advisers, says that even as America deals with widespread foreclosures, a contracted lending market, and a rising unemployment rate, the current economic conditions pale “in comparison to what our parents and grandparents experienced in the 1930s.”

The bank failures and plummeting real estate and stock values that have defined the current recession are similar to those seen in 1929 and are of great concern, Romer says, but she believes these financial problems are being aggressively addressed by the Obama administration.

The government has approved a $787 billion economic stimulus package, enacted programs to halt foreclosures, and conducted “stress tests” to determine the financial stability of banks. This administration is committed to doing “whatever it takes,” she said, to right the economy and get banks lending again.

A Breakdown of the Economy: Then and Now

Unemployment

Then: When the Depression began in 1929, the unemployment rate was at 3.2 percent. Four years later, the jobless rate had risen to 24.9 percent.

Now: Although the United States has lost 4.4 million jobs since the recession began in December 2007, the unemployment rate is still in single digits at 8.1 percent.

Consumer Debt

Then: In the 1930′s, outstanding consumer debt was 9.6 percent of Americans’ household income.

Now: In mid-2008, outstanding consumer debt was roughly 14.1 percent of Americans’ household income.

Homeownership

Then: The homeownership rate fell from 49 percent in 1929 to less than 44 percent by 1944.

Now: The homeownership rate is at 68 percent.

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