Perhaps the difference between recession and depression is mostly psychological. If we give up, then long term recession and stagnation may be inevitable. John Maynard Keynes said, "If the animal spirits are dimmed and the spontaneous optimism falters, leaving us to depend on nothing but a mathematical expectation, enterprise will fade and die." I'm not sure I completely agree with that, but I do think that the mathematical expectation drops precipitously if the "animal spirits are dimmed". If everybody is all depressed and doesn't work as hard, doesn't invest as much, and doesn't partake as much of the available goods and services, it puts the economy into a more or less permanent downward spiral.
From the mathematical expectation standpoint, we're nowhere near the great depression. We're only starting to approach the recession of the early 1980s.
But from a psychological depression standpoint, it seems to me that we've already shot by that recession and are headed to unknown depths. The diversity of gloom is impressive. It's not surprising that Republicans and the Right are depressed - they're out of power, out of (marketable) ideas, and out of luck and they know it. However, when people like Paul Krugman are also depressed, given that they control all the reins of power and should be ecstatic to be able to enact all of the programs they've been drooling over for decades, it shows an extraordinary breadth of despair.
With despair, despondency, and depression can come political instability. Political instability has led to some truly frightening scenarios in the past:
The sad truth is that democracy itself is often unstable. Intellectuals lose faith. Democracy is not flashy. It falls out of fashion. The intelligentsia feel scorned, unappreciated, and turn to new theories.It's remarkable how apropos the above excerpt is to the current situation given that it was written in 1983 as "the introduction to an anthology of science fiction stories" by writer Jerry Pournelle. Remarkably descriptive and predictive. I'm rather hoping that the next part of his introduction isn't predictive:
There are other pressures. Republics stand until the citizens begin to vote themselves largess from the public treasury. When the plunder begins, those plundered feel no loyalty to the nation—and the beneficiaries demand ever more, until few are left unplundered. Eventually everyone plunders everyone, the state serving as little more than an agency for collecting and dispensing largess. The economy falters. Inflation begins. Deficits mount.
Something must be done. Strong measures are demanded, but nothing can be agreed to. [...]From the ancient Greeks to the Romans to the Germans, democracies with economic problems faltered and turned to the dictator. I have no doubt that eventually America's time will come when it turns to the dictator.
Enter the strong man, who will save the state.
Is that time here already?