I may not have a degree in economics but, neither do these AP writers who wrote about recessions turning into depressions. As someone who reads a great deal of works from the Austrian School of Economics, there is just an enormous amount of misinformation in that particular AP article.

The article wastes time by going into what defines a depression. I don’t see how the terminology is going affect the real situation that people are facing. So while the article tries to define what a depression is, it makes many economic fallacies.

“Morici says a depression is a recession that “does not self-correct” because of fundamental structural problems in the economy, such as broken banks or a huge trade deficit.”

There are no such things as recessions or depressions that do not self-correct. They always self-correct. The depression or recession can also be called a correction. It is a correction on a massive scale due to the massive boom created by artificial means–eg: arbitrary interest rates set by a central bank.

When stock prices go up to astronomical levels in respect to the company’s earning potential, then there is a bubble. When that bubble bursts and the stock price pulls back, we call it a correction. It is exactly the same when entire industries or economies are in a bubble and that bubble bursts. A correction is taking place. To try and stop the correction is trying to maintain an illusion.

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Fantastic video based on Ron Paul’s speech to congress asking “what if” questions. Great speech made better by fitting music and creative art.