The viral TikTok trend known as the “silent depression” has sparked controversy, suggesting that Americans are worse off than during the Great Depression. The trend claims that key expenses such as housing, transportation, and food are consuming an increasing share of Americans’ incomes. However, economists strongly disagree with this trend.
“TikTok Is Divorced From Reality”
Columbia Business School economics professor Brett House dismisses the idea, stating, “Any notion from TikTok that life was better in 1923 than it is now is divorced from reality.”
He emphasizes that today, life expectancies are longer, the quality of life is better, opportunities for personal growth are greater, human rights are more widely respected, and access to information and education has significantly expanded.
Economically, the U.S. has defied recessionary forecasts, with the National Bureau of Economic Research officially defining a recession as “a significant decline in economic activity that is spread across the economy and lasts more than a few months.”
Despite concerns raised on TikTok, the latest quarterly GDP report exceeded expectations, and the Federal Reserve’s efforts to control inflation have been successful.
Historical Perspective on Depressions
Susan Houseman, research director at the W.E. Upjohn Institute for Employment Research, emphasizes that the only depression the U.S. experienced in industrial times lasted a decade, from 1929 to 1939. Comparing the current economic indicators, experts argue that the country is far from experiencing a depression.
Sung Won Sohn, professor of finance and economics at Loyola Marymount University, stresses that while the economy is slowing and the job market is cooling, the U.S. is not in a depression. The unemployment rate stands at 3.7%, and the economy continues to grow, refuting claims of a silent depression.
Despite these assurances, many Americans, especially lower-income families, are grappling with the impact of rising prices and depleted savings. Tomas Philipson, a professor at the University of Chicago, notes that inflation has hit the poor more than the rich, affecting essential categories like food, rent, and gas.
Housing Market Influence on Public Sentiment
Housing, in particular, has significantly influenced Americans’ perceptions of the economy. The S&P CoreLogic Case-Shiller Index reports a 6.1% year-to-date increase in home prices, contributing to a sense of financial strain. Though slightly reduced, mortgage rates remain above 7%, and a shortage of homes for sale further compounds the housing market challenges.
In conclusion, while TikTok may popularize the concept of a silent depression, economists argue that the current economic landscape, marked by growth, controlled inflation, and low unemployment, is far from the dire conditions of the Great Depression.
The housing market and rising prices may contribute to public sentiment, but experts emphasize that we should take a more nuanced understanding of economic indicators instead of listening to TikTok trends.
What are your thoughts on this? How can we address the disparity between public sentiment, as influenced by trends like the “silent depression” on TikTok, and the objective economic indicators?
To what extent do viral trends on platforms like TikTok contribute to shaping public perceptions of the economy? How can this influence be leveraged responsibly?