As a Denver, Colorado personal bankruptcy lawyer I am always interested in the state of the economy.

 The Nobel Prize winner and professor of Economics and International Affairs at Princeton University, Paul Krugman, wrote an article in the New York Times last week on the state of our economy that caught my attention. He discusses the fact that we are not heading for another “Great Depression” (refer to my blog recession or depression for another discussion of this topic). He believes that the economy is no longer at the “edge of the abyss.”

The possibility of landing in the abyss was very real a few months ago. In some ways the 2008 financial crisis was comparable to the early 1930’s, with world trade, global industrial production and stock prices plummeting as fast as they did then. Fortunately, the economic downward trend has ended after one truly bad year, whereas in the 1930’s it continued to drop.

The very different role played by our government rescued us from a total replay of the “Great Depression.” The most significant aspect of the government’s role is what it has not done. The federal government hasn’t cut spending, despite a decrease in income. Social Security checks continue to be sent out; Medicare continues to cover hospital bills; federal employees are still being paid. This has stabilized the economy during this time of crisis.

In addition, the government has taken steps to assist the financial sector. There are some questions about how the bailouts of financial firms have been handled, yet it is important not to forget that without the bailouts things would have been much worse. And finally, the government’s American Recovery and Reinvestment Act has played an important role in establishing approximately a million more jobs than would have been in place without it.

Krugman concludes that although the economy remains in trouble, “we appear to have averted the worst: utter catastrophe no longer seems likely.”