When Does A Great Recession Become a Full-Fledged Depression?
Economists have their standard definitions. They work their numbers and proclaim when we are in a recession, out of a recession, when an economic recovery is taking place, and when that recovery is merely hitting a “soft patch.”
But really, who but the media, government officials, and economists themselves take these definitions seriously anymore when it comes to reflecting reality as experienced by most Americans? These days, not many people.
For most Americans, the recession didn’t end two years ago, economist definition notwithstanding. A recovery did not begin then. And the “soft patches” that have been occurring regularly in the last two years are not natural and unavoidable dips on the road back to traditional American economic well-being.
The country is still wallowing in recession. Unemployment has been vacillating between awful and getting more awful. Employment itself, except for those in the top economic rung, is not leading to any improvement in economic lifestyles, but rather a slow contraction of these lifestyles.
Given these realities, and the curiously detached mode of economist reportage, it is unlikely we will hear the “D” word uttered soon by these bean counters, or the media and public officials who employ economist terminology in their own economic descriptions. From them you won’t hear that we are on the lip of of full-fledged depression. But we are.
The tipping point that will push us into this full-fledged depression is the imminent dramatic cut back in federal spending. A dominant Republican fringe demands it. A beaten Democratic Party, unwilling to fight for the sensible alternative, taxing the cosseted rich, will enable it.
Unemployment will rise dramatically in the wake of these cuts. The spending power of a large segment of the population, already spending stressed, will evaporate further. A now virtually growth-less economy will remain officially flat or sink — though not enough to evoke the official “D” word.
An economic depression, though, isn’t really about numbers. More than anything it’s a frightened and beaten feeling that spreads through a national population. A pervasive feeling that no matter what most people want, how hard they work or seek work, how thrifty and prudent they become in their personal lives, the only major changes that will actually result are those that serve the wishes of an all-powerful minority. Which leads to a loss of hope that undermines an ability to rise out of a downward spiral.
So then, When does America’s Great Recession morph into a new Great Depression? I’m pegging the start date as this coming Tuesday, when our addled political class somehow manages to avoid formal default by agreeing to screw almost everyone else while defending the inalienable right of our top 1 percent of earners not to be deprived of a tiny slice of their wealth.
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