Actually, the 1980's were a VERY prosperous time for the US. We had a mild recession in the last year or two of the first Bush administration, but Regan pulled us out of the Carter recession which was far worse than what we are going through now. Back then, Carter came up with "The Misery Index", and is famous for saying "The country is in a malaise". Inflation was out of control, mortgage interest rates were up around 20%, unemployment was much higher than it is now, there was the second Arab oil embargo, the top marginal income tax rate was 70% ! Regan came in and cut the tax rates on everyone and saw real tax revenues double the year after he did it. The government can never be the cause of prosperity, only the cause of the lack of it. Regan realized this and removed the shackles that had been imposed on business by the Democrats and saw the economy grow because of it.
Anyhow, comparing today to The Great Depression, there really is no comparison. During The Great Depression, unemployment reached almost 26%, today we are around 6%. You also have to look at the effects of the Smoot-Hawley Tariff Act which was overly protectionist and further stifled trade. Then there was the huge drought in the plains states known as The Dust Bowl. Add to that agricultural prices that plummeted so that farmers no longer found their farms economically viable and you had a perfect storm of economic chaos. Some also believe that the New Deal policies of FDR further prolonged the Depression by being overly restrictive on business's ability to function. Even by 1939 the unemployment rate was still 10% and that is when some consider the Depression to have ended.
This is a recession, not a depression. Could it get worse? Yes it could. There are factors in play that could worsen the situation. Remember that the 1929 market crash was caused partially by the under capitalization of margin purchases of stock speculation. Today, we had under capitalized houses that were purchased based upon the "Greater Fool Theory", and that value is no more likely to return to the economy in the short term than that which was lost in the bust of the dot com bubble. The important thing is for the government to not over react to this short term problem with policies which will stifle economic growth in the long term. Many people believe that the New Deal actually prolonged the Depression rather than fixing it, and a recent study by a UC Berkley (or is it UCLA?) group spells out how The New Deal prolonged the Depression by about 7 years. One of the major factors was a very pro-union piece of legislation passed in 1937 which had the net effect of plunging the economy into a second depression within a depression. Obama now wants the "card check" program to essentially force the unionization of all businesses which would do the same thing. Plus, the higher you make taxes, the less money exists in the private sector to provide real economic growth.
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