Do We Have A Depression In America?

Forget recession. Is America in the midst of a full-blown, no joking, outright depression?

“If the notion that we are merely living through the aftereffects of a mere ‘recession’ that ended in 2009 sounds somewhat ridiculous, that’s because it is,” says Richard A. Posner, a federal judge and law school lecturer based in Chicago. “If we were being honest with ourselves, we would call this a depression. That would certainly better convey both the severity of our problems, and the fact that those problems have no evident solutions.” (See: Let’s Be Honest: We’re in a Depression, Not a Recession, And There’s No End In Sight, August 22, 2011)

Posner is an authority on both the law and economics, a man widely cited for his insight and analysis.

So is Posner right?

We usually think of a “recession” as a period when there have been straight quarters of economic decline. A “depression” is something worse. It’s a 10 percent drop in the gross national product or a decline that lasts at least three years, according to The Economist.

But forget academic definitions. When a large percentage of the population is hurting it’s a depression.

  1. If you’ve lost your job it’s a depression.
  2. If you’re underpaid because you’re afraid to leave your job it’s a depression.
  3. If your mortgage debt is bigger than the value of your home it’s a depression.
  4. If you’ve saved for years and now your nest-egg produces virtually no income because interest rates are near zero it’s a depression.
  5. If you don’t have health insurance and break your arm it’s a depression.
  6. If you can’t send your kid to college even with two scholarships it’s a depression.
  7. If your kid graduates from college and can’t get a job it’s a depression.
  8. If your company no longer has the skills or equipment to fix something made in America 30 years ago it’s a depression.
  9. If you’re a government worker with 20 years on the job and your governor thinks money can be saved by reducing your benefits or eliminating your position, it’s a depression.
  10. If your company wants to increase shareholder returns by downsizing, rightsizing, reorganizing, or restructuring it’s a depression.
  11. If corporate leaders get executive bonuses and your salary is frozen it’s a depression.
  12. If your employer is making big profits, paying almost no taxes and cutting back your benefits and hours, it’s a depression.
  13. If you’re a skilled employee and you must compete with workers overseas who make 75 cents an hour, it’s a depression.
  14. If you’re a farmer and your crops lack water it’s a depression.
  15. If your law firm has cut back on its professional staff, if your college no longer grants tenure, if the human resources department has 500 resumes for your job, it’s a depression.

What do you think? What’s your definition of a depression? Please add your comments below.

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6 Comments on "Do We Have A Depression In America?"

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  1. John Kelly says:

    The current economic condition is actually the new normal. It was created by free trade advocates who shipped millions, yes millions, of good paying jobs overseas. It was planned that way, free trade, national competitive advantage. America’s advantageous were finance and agriculture. To benefit those areas tariffs on manufactured goods were reduced to almost nothing. American labor then had to directly compete with very low manufacturing wages overseas. Millions became unemployed: welfare went through the roof, wages tanked. Next, engineering jobs followed manufactured, then management went. We did get those cheap plasma tvs and clothing. No “tax cuts” will change the outcome. No “small business growth” will change the outcome. No “green energy” initiative will change the outcome. This new normal was purposely created by government policy and it will stay the way it is unless government policy changes. The existing government has been bought by money interests (TARP, QE1, QE2, hidden loans to banks by the FED, low interest rates, all benefit or benefited the banksters; working people need not apply).

  2. OurBroker says:

    “Corporatism” looks good to me. See:


    I’m not sure what we have, but I do think that greed and self-interest now play a bigger part than usual.

  3. Wayne Bowling says:

    I have to agree with Dean Marshall’s comment. We have been deregulated to the point that the plutocracy will now dictate our lives. We’re actually heading toward what some now called “corporatism.” (Did I spell that right?)

  4. Dean Marshall says:

    The US economy is “flat line” comatose, but too many of us are in such complete denial we can’t see it. We keep holding out for a return to the “good old days” of the American Dream. Clearly if you aren’t appalled by the incompetent buffoonery for what passes as our political leadership these days, either Republican or Democrat, than you must be delusional or smoking some very potent herb. All the safeguards that were put in place to restore and protect the economy after the Great Depression, like Glass-Steagall, have been whittled away by the “mavens of deregulation” in their depraved lust for obscene profits. Washington takes its marching orders from Wall Street. That’s why we’re a plutacracy not a democracy. We’re no longer citizens of a free republic, but indentured servants to the nation’s richest 1% fighting over their table scraps like mad dogs.

  5. It’s not globalization at all. It’s because tax systems punish companies and people for working and reward those who rent-seek in real estate. Trouble is, this sends production off-shore (to where land prices, taxes and labour are cheaper) and eventually blows up real estate bubbles at home that burst. As my site shows, this a depression all right!

  6. Layne says:

    Yes it’s a depression and was directly caused by globalization!

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