Are we in a depression?

The Great Depression II
By Kirk W. Kelsen

One basis for deciding whether we are in a "recession" or a "depression" is distinguishing how recessions become depressions. With the hindsight of history, we already know.

Parallels between America's current economic crisis and the 1930's Great Depression are instructive. Then, as now, hardship was preceded by a major banking upheaval. Then, as now, a regulatory blizzard followed. Then, as now, millions were displaced. And then, as now, the cause of the Great Depression was widely misunderstood. Many believe today that the 1929 stock market crash caused the Great Depression all by itself, that it was so severe it mysteriously destroyed wealth for another 13 years. To put that in perspective, the serious Carter-era recession should have, by this logic, precluded the Reagan recovery in 1982 and perhaps wreaked havoc until 1990. Not only is this argument absurd, it manifestly did not happen...

From what I can tell, the total number of unemployed in America today is at least 37.5 million, rising to over 65 million if the underemployed are included. These numbers sound too big to be true but can be pieced together from a variety of sources, including the BLS.

37.5 million unemployed out of 150 million potential workers -- one in four. If this is correct, then where are the bread lines? First, Americans entered the current downturn far wealthier than ever before. Many survive today on fast-depleting retirement accounts and strained credit. Second, massive security nets -- welfare, extensive unemployment benefits, disability payments, and school loans -- have disguised or deferred the physical presence of otherwise visible hardship and deprivation. Government-backed programs, many themselves insolvent, are the "bread lines" of today.

Persistent high unemployment will not soon resolve: job creation currently lags population growth. About 145,000 jobs must be created every month to reach parity -- not growth. 400,000 jobs would need to be created to replace by 2013 the jobs lost since 2007. Even with a sustained recovery starting immediately, it would take at least eight years to recover jobs lost during the last two.

Read more:
http://www.americanthinker.com/2011/01/the_great_depression_ii.html