It seems we managed things a bit better than we did 80 years ago

The 30 years prior to the great depression were a time of huge change due to technology transforming agriculture.  In the year 1900 nearly half of the people in the most advanced countries of the world worked directly in growing crops. 30 years later, when the depression hit, this level had dropped to 20% and continued to plummet. 

Many individuals who expected to work their farms as had their parents instead found themselves without that livelihood - and unprepared to do other work. This made unemployment high and this in turn made wages drop.  Family incomes dropped and consumer spending was sent into a nosedive.  Our governments and other institutions did not respond adequately and our economies collapsed. This was the root cause behind the depression - radical change in the livelihoods of a large segment of our population.

In recent years we've seen another big loss of jobs, this time in industry and manufacturing.  From 1960 to 2010, the levels of our workforce employed in this sector dropped from 35% to 20%.   Some of this was due to increased imports of  manufactured goods from overseas, but most was due to technological advancements raising productivity levels and this then eliminating jobs.

Starting in about 2000 the effects of the loss of these jobs, plus our shift to older aged population began to slow our economy. Our response was to stimulate the economy with incentives to banks to encourage loaning more money and with incentives to consumers to encourage more spending and buying. This kept businesses producing goods and kept people in jobs - for a while.  But it could not be sustained.  By 2007 our economy was 10% inflated, and at that point it couldn't be held together any longer - it began to crash.

In the 5 years that followed major federal deficit spending was used to stop and to reverse the crash:  much money was given to the states for infrastructure projects (to keep more people from becoming unemployed); money was given to the states for retaining state employees such as police and teachers (to keep more people from becoming unemployed); much money was given to the jobless in the form of unemployment compensation (to maintain consumer spending levels); much money given to the poor in the form of food stamps and other aid (to maintain consumer spending levels); and much money was given out to financial institutions (to keep the finance sector from failing).

Compared with the 1929 depression, it seems we managed things better this time. Unemployment levels have been steadily dropping since 2008 and are now down from 10% to near 7%, financial institutions are profitable again, our businesses are strong, efficient and lean.  The stock markets are at all time highs.  The federal debt, as a percentage of our annual GDP, actually decreased in 2013.  I'd say we made the right choice in the path we took.

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