But today I got my hands on alarming graphs from the folks at VoxEU (via a column by Martin Wolf) which convincingly demonstrates that, for the much of the world, 2009 looks, without question, just as bad, if not worse, than the first years of the Great Depression.
The study, which you might have seen, by Barry Eichengreen and Kevin H. O'Rourke, assumes the starting date of April 2008 and compares the current worldwide recession to the worldwide depression that began in June 1929. Here's the digest of most significant indicators.
And here's a look at the devastation on industrial output in four major European countries. If you can't read the print, they are (clockwise, from top-left:) France, Germany, UK, Italy. One thing to note is that the percentage of industrial drop-off in Italy is already worse than the UK's 40-month low in 1932. 
Where are the silver linings? The good news is that the world is responding much quicker to the crisis of 2008-9 compared to the Great Depression. Central bank interest rates rates are lower all over the world and monetary expansion has been much more rapid this time around. At the same time, Martin Wolf cautions that world governments will be faced with a rock-and-a-hard place dilemma with regard to fiscal stimuli and monetary policies. One the one hand, we don't want to repeat the mistakes of 1937 America or 1990s Japan and double dip into recession by pulling back too soon. On the other hand, the danger of stimulus being withdrawn too late is "a loss of confidence in monetary stability worsened by concerns over the sustainability of public debt, particularly in the US, the provider of the world's key currency."
The USA was a net exporter leading up to the the great depression (think China). Leading up to this recession we were a net importer. The recession forces us to cut consumption which leads to reduced imports which hurts the exporting countries disproportionately.
Right now is a good time to discuss the systemic problems that led to this recession. The USA has been living beyonds its means for a long time and it is way beyond time to stop. The rest of the world has enjoyed our spendthrift ways because it feeds their export led economies. Our spending on imports was the engine that pulled the world economy. Exporting countries want us to inflate a bubble (let's call it the stimulus bubble) so that we will buy their exports.
The USA has been trading jobs for cheap imports. We have to start producing as much as we consume. We have to balance our government spending (over the long haul) with government revenue. It seems certain that inflation is going to be a big problem in the near future. The BRIC countries (Brazil, Russia, India, and China) are now challenging the use of the dollar as the reserve currency because they fear the USA will devalue the dollar.
When we spend these huge amounts on stimulus, we are trading short term pain for long term pain. We are also spending precious money in the most inefficient and wasteful way imaginable. Does anybody think that Nancy Pelosi is qualified to design a stimulus package? Is any politician qualified to design a stimulus package? Does anybody imagine that politicians, when they craft a stimulus package, are doing anything beyond looking at their next election?
Has anybody done an analysis of what constitutes a well designed stimulus package? How does our stimulus package compare with the ideal? Isn't the existing stimulus package a political boondoggle that is haphazard, morally hazardous, wasteful, inefficient misuse of precious capital?
If you want to improve the economy, shouldn't you do everything possible to make it easier for small companies to create jobs (since that is where the bulk of job creation occurs)?
Is there anybody that thinks that permanently increasing the size of the government (thus reducing the private share of the economy) is going to make the overall economy more productive, efficient, and better at generating wealth?
Politicians are, as a class, poorly regarded in the USA. It is commonly recognized that most politicians know little about anything besides politics, and tend to be dishonest, corrupt, venal, power hungry, hypocritical egomaniacs. Why should we turn our economy over to them?
Can we please drop the destructive Keynesian views about simulus, interest rates, and the like. Interest rates need to INCREASE, to clear out the bad, unsustainable malinvestment. We need to CUT government spending. There is nothing wrong with deflation and in fact, the monetary expansion/inflationary path we are heading on is going to be catastrophic. I suggest you take a look at what the Austrians have been saying for quite some time. Go see what Peter Schiff has to say.
Everything that is happening right now is a direct result of artificial money pumping, interest rates kept too low for way too long, and policies which diverted resources into non-productive and consumptive avenues. Is it impossible that we can borrow and spend, or worse, print and spend, our way out of this. We need more savings, more investment, and LESS consumption. We need solid money once again, not those silly pieces of green paper that are worthless, if not now, very soon to be so.
Perhaps you should review what actually happened to cause the depression, and compare it to the 1920-21 recession. The Hoover/FDR path is almost the exact same as currently under Bush/Obama. And one can only imagine that the results won't be the same, they'll be far worse.
We lowered interest rates and pumped a lot of free money into the system, and created an internet stock bubble for companies that lost money on every sale and made it up in volume. Then we lowered interest rates and pumped a lot of free money into the system, and created a housing bubble that supposedly made my house double in value. Now we're lowering interest rates, pumping a lot of free money into the system...
Stop. Just stop.