A piece in the Boston Globe by Drake Bennett thinks through how a 21st century depression would differ from the Great one:
Unlike the 1930s, when food and clothing were far more expensive, today we spend much of our money on healthcare, child care, and education, and we’d see uncomfortable changes in those parts of our lives. The lines wouldn’t be outside soup kitchens but at emergency rooms, and rather than itinerant farmers we could see waves of laid-off office workers leaving homes to foreclosure and heading for areas of the country where there’s more work – or just a relative with a free room over the garage. Already hollowed-out manufacturing cities could be all but deserted, and suburban neighborhoods left checkerboarded, with abandoned houses next to overcrowded ones.
And above all, a depression circa 2009 might be a less visible and more isolating experience. With the diminishing price of televisions and the proliferation of channels, it’s getting easier and easier to kill time alone, and free time is one thing a 21st-century depression would create in abundance. Instead of dusty farm families, the icon of a modern-day depression might be something as subtle as the flickering glow of millions of televisions glimpsed through living room windows, as the nation’s unemployed sit at home filling their days with the cheapest form of distraction available …
In a deep and sustained downturn, home prices would likely sink further and not rise, dimming the appeal of homeownership, a large part of suburbia’s draw. Renting an apartment – perhaps in a city, where commuting costs are lower – might be more tempting. And although city crime might increase, the sense of safety that attracted city-dwellers to the suburbs might suffer, too, in a downturn. Many suburban areas have already seen upticks in crime in recent years, which would only get worse as tax-poor towns spent less money on policing and public services.
The way to think about this, in general, is to think about the nation’s living conditions along the entire income distribution and then imagine that distribution shifting downward: Whole Foods patrons move to Reasor’s, Walmart customers try Big Lots. Middle income families accustomed to fresh produce buy more processed foods, and the nation’s waistlines (as the author argues) actually grow as a result of the depression. Families drop health insurance, ER’s are even more strained, and hospitals (like our own imperiled OSU Medical Center) – already on the financial brink from indigent care – collapse under the weight of additional indigent demand and state and local cuts in healthcare spending. Mediocre students from wealthy families replace overachievers from poorer families at the nation’s elite universities; students who would attend 4-year regional public universities switch to community college; community college students attend vo-tech centers. And it goes on.
The result would be a less healthy, less educated, less competitive, less socially connected population. In other words, our nation would resemble its poorest residents much more closely. And that would certainly make a recovery take that much longer.