Fact Check: "The Great Recession of 2007-2009 was the worst economic slump since the Great Depression."
What We Know
The Great Recession, which lasted from December 2007 to June 2009, is widely recognized as the most severe economic downturn in the United States since the Great Depression of the 1930s. According to a study by Kalleberg and von Wachter, the Great Recession was exceptional in both its duration and depth, lasting 18 months and resulting in a decline of about 6% in GDP and jobs, alongside an 8% drop in median family incomes (Kalleberg & von Wachter). The International Monetary Fund (IMF) characterized it as the most severe economic and financial meltdown since the Great Depression, highlighting its global impact and the unprecedented nature of the crisis (Wikipedia).
The recession was marked by significant increases in unemployment, with over 30 million individuals losing their jobs, and a dramatic decline in household net worth, which fell by 18%—the largest loss recorded in the past fifty years (Kalleberg & von Wachter). Comparatively, the Great Depression saw unemployment rates peak at around 25%, while the Great Recession's peak was about 10%, indicating that while the Great Recession was severe, it did not reach the same level of unemployment as the Great Depression (CNN).
Analysis
The claim that the Great Recession was the worst economic slump since the Great Depression is supported by multiple credible sources. Kalleberg and von Wachter's research provides a detailed account of the recession's impact on the labor market and the economy, emphasizing its unprecedented nature compared to previous recessions (Kalleberg & von Wachter). The IMF's assessment further corroborates this view, noting the global ramifications and the depth of the financial crisis that triggered the recession (Wikipedia).
However, comparisons between the Great Recession and the Great Depression often highlight that while the former was severe, it did not reach the catastrophic levels of the latter, particularly in terms of unemployment rates and economic contraction (CNN). The Great Depression was characterized by widespread bank failures, a collapse of international trade, and a prolonged period of economic hardship that lasted for nearly a decade. In contrast, the Great Recession, while devastating, was followed by a recovery period that, although slow, did not result in the same level of prolonged economic stagnation.
It is also important to consider the sources of information. The study by Kalleberg and von Wachter is published in a reputable academic journal, lending it credibility, while the IMF and CNN are established organizations known for their economic reporting. However, the CNN article does take a more comparative approach, which may introduce some bias in framing the Great Recession as less severe than the Great Depression.
Conclusion
Verdict: True
The claim that "The Great Recession of 2007-2009 was the worst economic slump since the Great Depression" is accurate based on the evidence presented. The Great Recession was indeed the most severe economic downturn in the U.S. since the Great Depression, characterized by significant declines in GDP, employment, and household wealth. While it did not reach the same catastrophic levels as the Great Depression, its depth and duration were unprecedented in the post-World War II era.
