After years of avoiding using the word recession, many Americans now wonder if the unhealthy American economy might soon be tipped into a second Great Depression. Such questioning is not just scare-tactic rhetoric from the politicos; like the Great Depression, the current crisis has been caused by the exploitation of credit and excessive speculation, with many losing assets held by institutions like Wachovia. Some experts, like UC Irvine economics professor and National Bureau of Economic Research researcher Gary Richardson, say that “the mess in the financial system is probably a lot worse than it was in the 1930s.”

The San Francisco Chronicle reports:

Economists can readily tick off numerous parallels between today's economic climate and that of the late 1920s. But many of them immediately bring up important ways in which this time is different.

"That was a period of rising economic inequality; this is a period of rising economic inequality," said David Moss, professor of economic history at Harvard Business School. "That was a time of exuberance in financial markets; this is a time of exuberance in financial markets. (Both times) there was a big rise in consumer debt and leverage in general. That was a time when installment credit was taking off. People were buying all sorts of items - automobiles, radios. There were a lot of consumer purchases on installment credit. There was a lot more reliance on debt, including buying stock on margin."

But he and others also enumerated many critical differences today.

One of the biggest is the very fact that the Great Depression already happened and has been intensely studied - including by Federal Reserve Chairman Ben Bernanke.

"We have learned from history," said Gregory Clark, chairman of the economics department at UC Davis. "The people running the Federal Reserve and Treasury are acutely aware of that possibility (of another depression). Politicians all know about the Great Depression, and because of that previous experience are willing to (let go of) worry that we're just awarding bankers" with rescue plans.

Who are these politicians of whom Clark speaks, the politicians who “all know about the Great Depression”? If by that he means that they’ve heard of it, then yes, that’s probably true. We’ve already seen Senator McCain exploit the collective American memory of the crisis with mention of Hoovervilles during the last presidential debate. But how many politicians actually understand the causes of the Great Depression? Or how we can salvage the country in the case of another, perhaps more severe crisis?