The difference between a Recession and a Depression

Lately, all that I have seen in the news is the increasing unemployment rate, the downward spiral of the stock market and the increasing foreclosure rates. To add to that, we have all of those in the financial and economic world proclaim that we are not in a depression rather a recession. Now these well educated and experienced professionals tout all kinds of evidence that support that statement. Obviously I do not agree with them but rather than trying to argue that point, I thought my time would be better served by investigating and stating the facts as they are.
First why don’t we get a clear understanding of the definition of recession? By most economist standards, the definition of recession is a decline in the Gross Domestic Product for two or more consecutive quarters.
That leads to the question, what is an accurate definition of Gross Domestic Product? Gross Domestic Product or GDP is the total value of all final goods and services produced in a particular economy; the dollar value of all goods and services produced within a country’s borders in a given year.
A depression by most economist definition is any economic downturn where real Gross Domestic Product declines by more than 10 percent.
Now that we have a clear (???) understanding of the terms recession, depression and GDP, let’s examine the facts as they are occurring right before our very eyes. I do not know of a household in America that is not suffering in some shape, form or fashion regardless of how much income that household makes. If you were a guru on the stock market, you are hurting because the stock market is at its lowest point in over 25 years. If you were a 20 year employee at a national company like Circuit City, General Motors or a bank like Washington Mutual, Wachovia or Countrywide (take your pick) then you have probably suffered from cutbacks, layoffs or terminations. Finally, if you are dealing with the possibility of losing your home then it is probably due to one of the aforementioned situations so what is a hard working law abiding citizen to do? Where do you turn for a solution while attempting to maintain your dignity when economists are bickering over the issue of whether we are in a recession or a depression?
Now I am not a smart guy but here is the way I see it since I now understand the difference (since it is pretty obvious to me that there has been a 10 percent or more decline in GDP) between a recession, a depression and GDP that this does qualify as a recession. Add to that the fact that most Americans have been suffering for the past year or more which passes the “definition of depression “test for me. This brings me to the conclusion no matter how you look at it and no matter how you apply the definitions of the terms we are all suffering from tough times.
We have to get away from the book definitions and look at the real world suffering that is going on in households today which should force us to focus on real solutions and provide real help to all of us that have been affected!
So what does it matter if we are in a recession or depression when the answer does not solve the truly critical question which is…when will there be a solution?