Do Americans Really Expect Another Great Depression?

According to a recent study, about six out of every 10 American citizens consider another depression in this country a likely occurrence. More than 1000 Americans were surveyed recently by a major research poll company in association with CNN in which they mentioned many of the problems faced in the 1930s, including major bank failures, an unemployment rate of over one-fourth the population, and millions of citizens homeless or unable to pay for food. The response was that 20% of those surveyed said they thought that depression was very likely to occur. Almost 40% consider it somewhat likely to occur. A third said that they don't think that depression is very likely, but only 10% say that they don't think it will happen at all.

Most people don't understand what a depression actually is, and experts think this is reflected in the polls' numbers, although pretty much all analysts agree that the economy and its risks are severe. They also acknowledge that 2008 has been a recessionary year and that the worst is probably ahead. What started as a soft recession will become a deeper one, but still, this does not predicate a depression or anything near it.

A likely forecast, even for the worst situation, would be an unemployment rate of about 10% in current times. But in order for depression to occur, the unemployment rate would have to almost triple from that number. So much depends on whether the government's recent bailout bill can unfreeze the credit markets. If it fails, the GDP in America will continue to drop. But thanks to Social Security, bank deposit insurance, and unemployment benefits, a depression in these times should not be quite as hurtful, or not the same, at least. Rather a more likely predicament would see hyperinflation, the condition where the value of money drop substantially and many items are simply too expensive for the average person to afford, including many food items. Not that this is any more desirable, but not quite the same as a depression.

Perhaps most importantly, another recent poll showed that 84% of Americans consider the state of the economy to be very unhealthy. Even more important than the definitions used to describe economic situations are the feelings of the country's citizens, which clearly are not favorable or even optimistic. The effects of the media and these surverys have a substantial impact on the mentality of citizens and their inclination to buy, therefore affecting the economy itself.