The Ottawa Citizen's Dan Gardner has a mission, one that is almost Quixotic in nature: solitary, noble, and doomed to failure. He has taken it upon himself to chastise lazy pundits who seek to augment their columns with injections of Ersatz GravitasTM (It's deep! It's cheap!) by comparing the present-day Canadian economy with the Great Depression. (A recent sortie.)
So Dan, here's a graph that you can use as a cudgel in your quest. It compares GDP during the Great Depression with the lower range of GDP forecasts described here:
If you squint, the two lines overlap almost exactly. But don't try it at home; you'll only get a headache. Leave it to the professionals.
[Updated to add the red text arrow.]
Worthwhile Canadian Initiative 
Highly amusing
You’re demonstrating that we won’t have a depression because economists aren’t forecasting a depression????
That is amusing.
If only the same reasoning could have prevented the current recession!
Stephen:
Yes. Quite.
All this “worst depression since the 1930’s” hype is foisted on people to get them accept the theft of their money by the U.S. Treasury Department, much as the “war against terror” is a bunch of hype foisted on people get them to accept the theft of their freedom by the U.S. Deptartment of Homeland Security, and “crime prevention” is a bunch of hype foisted on people get them to accept the theft of their right of self-defense by the U.S. Justice Deptartment.
What do you call people without money, rights or freedom?
I call them slaves.
Completely off topic, but I have been hearing Larry summers over the past few days, and his (republican’s?) suggestion that cutting the payroll tax would be an even better stimulus (and it would be means tested — since its capped at 100k).
Generally, I think that tax cuts are poor at stimulus generation, but I must say that the idea of reducing the tax burden on employment seems like a very stimulative idea (cuts the cost of employment, and gives back cash in the employees pocket — right off in his next pay check).
As some blogger say: What say ye!
Obviously we dont have anything similar here in Canada, but its an interesting proposal…no?
forgetn:
Reducing (or, better yet, eliminating!) income tax is the single most effective thing that could be done to stimulate the economy. Nothing would put more money in people’s wallets faster than to stop taking it away from them. And if “economic stimulus” doesn’t mean “putting more money in people’s wallets,” then it is a fraud.
Reducing (or, better yet, eliminating!) income tax would also have the extremely beneficial effect of forcing the government to downsize by depriving it of revenue. This would severely limit the government’s ability to interfere in the affairs of private citizens, which would be just as beneficial as putting more money in their wallets.
And for these reasons, it will not happen. Big government is not about benefiting the people. It is about colluding with big business to enslave the people.
My issue was not about small Vs. big government. It would seem at that a cut in payroll taxes would be incredibly stimulative; cash in hand for the employees and employers. It would give people cash immediately for spending (I suspect a preponderance in reducing mortgage and credit card debt), but it would also encourages employers to keep employees on, as the marginal cost of employing an additional worker would be lower.
^ Right…. As long as the first thing we cut is the military, police, justice and corrections system. Deal?
forgetn:
I agree with you completely. I was just pointing out why it won’t happen.
Andrew F:
Deal!
forgetn
agree – it is a good idea – but of course the payroll tax is NOT supposed to be part of the general government budget – would an equivalent payment be made to the trust funds (yes I know it is not a real issue just an accounting issue, but laws are laws).
Steven
I think there are good reasons to think that economic forecasts are always wrong, and also good reasons to think we’re in a heap of shit. Paul Krugman is not always right, but I wouldn’t bet against him.
P.S.
My view is that the PBO forecast is far too optimistic, but I think the great depression 2 won’t happen because people will rediscover Keynes.
reason: I hope you’re right and GD 2.0 is averted by a quick fix to the magneto. The GD 1.0 fix isn’t on the table this time around ’cause nobody gets out of WWIII alive.