The pause morphed into the correction, which got transmogrified into the drop in business, which shifted into the crash. The crash became the slump, which changed into the downturn and/or the slide, or the biggest economic crisis since the Great Depression. Scarier yet, President Barack Obama is now warning us that unless his rescue plan goes through , "our economic crisis could become a national catastrophe."
What say you to that, sports fans? Many are starting to say it looks as though we are heading into--or are already in--another Great Depression But what might a depression be? Although the word has been used in connection with bad economic conditions since the late eighteenth century, there is no agreed-upon definition comparable to what economists have for the word "recession."
There is agreement on one thing: a depression is a helluva lot worse then a recession. It means not just hard times, but very, very hard times lasting a very, very long time. Two, three, four, eight years. You might say a depression is an extended national catastrophe.
How will we know if and when we are in one? The usual comparisons to where the country is economically are with the Reagan recession of 1982, not with the Hoover Depression of 1929. We will know if we are in a full-blown depression when people begin using the word matter-of-factly. Or we'll know it if Warren Buffet tells us we are .
For a genuine, doctor-certified economic depression we have no Prozac or Wellbutrin or Zoloft or Celexa. At last America has come against a condition for which there is no pill. We have nothing we can ingest and then lie back and wait until our 401(k)s return to normal. From the way the president, the secretary of the treasury and the economists who weigh in on the topic talk, it seems that medical science knows more about curing cancer than economic science, if it is one, knows about dealing with the disaster now on our hands.
Those who believe we have fallen from recession to depression have yet to settle on a name. It could be the Second Great Depression (SGD) or Great Depression II (GDII) as per WW II, not that we need a Roman numeral to convince us that we are in trouble.
If we are in Great Depression II, what phase of it might we be in? Depending how you count, Great Depression I  lasted between nine and twelve years. The market crashed in 1929 and then with some temporary ups continued down for the next several years. The banks and the financial system began falling to pieces in 1931. Things got worse until March 1933, when President Roosevelt closed all the banks and gave them a stress test before letting the solvent ones reopen.
Even before the banking system conked out in 1932, business had gone to hell, taking millions of jobs with it. In the first quarter of 2009 business is way down, dividends are being cut, profits off and expansion is nonexistent, but things are not as bad as in 1933-34 when the homeless were all over, World War I vets were peddling apples on the sidewalks and families truly did not know when they would see their next meal. We are nowhere near that state.
There was no war going on in the early 1930s, which, depending upon your analysis, could be a plus or a minus. If government spending is an effective way to stimulate the economy, President Obama can be grateful he has not one but two wars to spend money on. He may soon have a third in Mexico to help stimulate things.
Whether America, which has not been able to defeat the Taliban, Al Qaeda or the rulers of the Federally Administered Tribal Areas of Pakistan, will have better luck against the Sinaloa drug cartel is an open question. But if war really contributes to the economic health of the society--do we really want to count on a longer war?