Many people worry that the world could experience another economic depression. However, once you understand the severity of a real depression, you will see we have come nowhere near that in recent years.

Answer: An economic depression is a severe downturn that lasts several years. Fortunately, the U.S. economy has not experienced an economic depression since The Great Depression of 1929, which lasted ten years. The decline in the GDP growth rates were of a magnitude not seen since: •1930 -8.6%
•1931 -6.5%
•1932 -13.1%
•1933 -1.3%.
•1938 -3.4%
During the Depression, the unemployment rate was 25% and wages (for those who still had jobs) fell 42%. Total U.S. economic output fell from $103 billion to $55 billion and world trade plummeted 65% as measured in dollars.

How does that compare to other recessions since then? During the financial crisis of 2008, economic growth plummeted, but nowhere nearly as bad as during the Great Depression. Although there were some steep downturns during a few quarters, there were no years where the economy contracted as severely as in the Great Depression. In 2008, the economy contracted .3%, and in 2009 it shrank 3.5%. (For details, see GDP Statistics.)

The 2001 recession had some bad quarters, but no years that were negative. In 1991, the economy contracted .2%. The 1980-1982 recession saw two negative years: 1980 was down .3%, and 1982 was down 1.2%. During the 1973-1975 recession, the economy contracted .6% in 1974, and .2% in 1975.

In fact, the closest the country has come to a depression was right after World War II, when economic engines readjusted poorly to peace-time production:
•1945 -1.1%
•1946 -10.9%
•1947 - .9%
•1949 -.5%