There was a time when all economic downturns were called depressions, which was brought in to replace the word panic sometime in the early twentieth century. These days we use the word recession, and reassure ourselves that we won’t have a depression. Federal judge Richard Posner thinks we should abandon this euphemism and call this downturn a depression.
From the Becker-Posner blog:
There appear to be three types of depression (why that word has been displaced by “recession” eludes me–who is supposed to be fooled by such a euphemism?). In one, the least interesting and usually the least serious, some unanticipated shock, external to the ordinary workings of the market, disrupts the market equilibrium; the oil-price surges of the early and then the late 1970s are illustrative. The second, illustrated by the depression of the early 1980s, in which unemployment exceeded 10 per cent for a time during 1982, is the induced depression: the Federal Reserve Board broke what was becoming a chronic high rate of inflation by an unexpectedly steep increase in interest rates, which shocked the economy. In neither type of depression is anyone at fault, and the second was downright beneficial to the economy. In the third and most interesting type of depression, illustrated by both the depression of the 1930s and the current depression, the cause is the bursting of an investment bubble.
On the one hand, calling our current situation a depression might help get people to take our economic condition seriously. On the other hand, there must be some value in using different terms to distinguish between degrees of economic malaise (there’s another out of use term). So what do you think? Should we just start saying depression instead of recession?