Depression vs. Recession

The Great Depression and the most recent Recession both share common causes: people’s inability to pay off debts combined with banks loaning too much money.  Throughout the Depression, millions of Americans were trapped in credit debt because of overspending. During the Recession, millions of Americans were unable to pay off their mortgages.  Both of these contributed to each economic slump. In both of the cases, GDP’s also fell by significant amounts. In both scenarios, unemployment rose as well, with the minority ethnicities of the population generally having a rougher time maintaining jobs and property compared to whites.  Although the Depression and Recession share many striking similarities, the impact of the Depression was much worse. The percentage of homeless was four times greater during the Depression, and the GDP fell approximately 10 times more. During the Recession, 500 banks failed compared to the near 10,000 that failed in the Depression.  In sum, the Recession and Depression shared common root cause and similar effects, but the Depression was more impactful and a worse in magnitude for America.