The skies are darkening, and ominous new considerations are intruding on the politics of 2008. The softening economy, accumulating foreclosures for homeowners, more

multibillion-dollar write-offs by major banks, the swooning dollar and stock market, oil prices approaching $100 a barrel--the list goes on, inviting a trendy cliché: the "perfect storm" stalking American prosperity. The Federal Reserve chair will never predict recession--it would be self-fulfilling if he did. But Ben Bernanke came close when he acknowledged to Congress that things are going to get worse before they get better.

Most Americans are ill prepared for a catastrophic reckoning. Everything else aside, the basic fact of our national condition is indebtedness. That means when jobs disappear and wages slump further, the struggle to keep up with the mortgage or rent will intensify for a broad swath of the population. The pain this time will not be confined to a few laid-off "losers."

Presidential candidates have not had much to say about these gloomy realities, but they soon will. A down economy adds another heavy blow to Republican prospects but also presents a challenge for Democrats. The incumbent party takes a serious hit if an election-year recession develops (ask Jimmy Carter, in 1980, or George H.W. Bush, in 1992). But that bad news might encourage Democrats to be even more cautious than they already are. Voters will want to know of a potential President, first, whether he or she grasps what is upon us and, second, what he or she intends to do about it if elected.

What should the candidates be calling for? The first imperative should be short-term measures to salve the pain of those who have lost homes or are drowning in debt. It's good politics, of course, but also an essential first step toward restoring a healthy and equitable economy--healthy because it is more equitable. Representative Bradley Miller has introduced a bill that would allow bankruptcy judges to ease homeowners' mortgage terms, but it's running into the usual big-money opposition--from both parties. For the longer term, government can enforce tightened mortgage regulation, which has fallen into disuse (Miller, Barney Frank and many others are co-sponsoring a good start). This kind of assistance is not unlike what government does for major corporations and banking institutions when they get into similar trouble. Meanwhile, financial firms should be disciplined--if not indicted--for the reckless behavior that led to the crisis.

Economic stimulus requires the government to get the money moving again in a stalled private sector, pumping up jobs, wages and benefits with emergency spending--and, yes, temporarily larger federal deficits. Taxing wealth and reviving the right to organize unions will start to redress the gross inequalities. The housing industry is not coming back to life anytime soon, but through public works programs we can repair our crumbling national infrastructure. We can restart public employment programs for displaced industrial workers and harder-to-employ inner-city youth. We can send working people back to school with financial aid aimed at community college students.

The point is, the coming storm, whatever its dimensions, is a great opportunity to begin restoring the role of responsive, effective government. The Republicans clearly don't get it. But it's not clear the Democrats do either, or that they have the nerve to embrace the possibilities. Voters should push them to speak to this moment. And then judge them accordingly.

• Get The Nation at home (and online!) for 75 cents a week!
• If you like this article, consider making a donation to The Nation.