This Depression would be different

ALBUQUERQUE (KRQE) - The country is not close to falling into a Depression, and even if it did it would not be a repeat of the 1930s, a university economist said today.

Wall Street's sharp swings underline how hard it is to predict what the economy will look like in the coming months, weeks or even days.

If the bad economy gets worse and the recession becomes a depression, would life be as rough as it was in the Great Depression 80 years ago?

First off, Prof. Allen Parkman, a University of New Mexico economist, said the country is in a recession and not near a Depression like the 1930s. And life today is far better than it was back then.

Still the economy isn't looking too good these days with Monday's official pronouncement the U. S. in a recession and has been for months.

"This is a unique event," Parkman said, adding, "A depression would be 20, 25 percent unemployment, and that's not likely to occur."

 

Seniors recall real Depression

 

A group of Albuquerque seniors recently told News 13 what life was like in New Mexico during the Great Depression.

"There was no money, no work, very little to eat," Ruben Flores said.

The commercial banking system had collapsed, money was short, and nationally one out of every four workers was without a job.

A lot has changed since then.

"Even under normal circumstances, unemployment benefits are available for 26 weeks," Parkman said.

 

Times would still be tough

 

So what might a modern-day Depression look like?

"The broad range of Americans have an amazing amount of discretion in how they spend their money, and so what you're

really likely to see in the short run at least, is people readjusting their expenditures," Parkman said. They're not likely to replace the meat they buy at Smith's with a cow in the backyard."

But he added many people would be forced to live without certain luxuries like satellite TV, and many would lose their homes.

But modern-day safety nets like unemployment benefits and the Federal Deposit Insurance Corporation, which protects bank deposits, would help avoid the pain and misery people saw in the past.

The average recession lasts eight to 16 months, but economists said this one could last longer.