Remembering the Depression: It Could Have Been So Much Worse

Millions lost their jobs. The market fell more than 50%. Thousands of businesses disappeared. National debt skyrocketed. Bailouts torched public trust in government.

But the most surprising thing about the past four years? That it wasn't worse.

Selling the counterfactual isn't easy. Hard-working people don't take solace in the line, "Be grateful. It could have been worse." But looking back at the history of financial panics, particularly the Great Depression, that line is probably more important than many realize. As controversial as the bailouts of banks like Citigroup (NYS: C) and JPMorgan Chase (NYS: JPM) were, they very likely prevented a terrible recession from becoming a full-blown depression.

I recently sat down with Mesirow Financial chief economist Diane Swonk. She explained that as bad as the economy is now, it could have been dramatically worse. Have a look:

What do you think? Share your thoughts below.

At the time thisarticle was published Fool contributorMorgan Houseldoesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel.The Motley Fool owns shares of Citigroup and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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