As Robert Samuelson of Newsweek points out,
"The "real economy" of spending, production and jobs -- though weakening -- is hardly in a state of collapse."
The currently scary possibilities and uncertainties are in the "shadow economy" of credit, securities, and markets. Since most of our financial media coverage is obsessed with Wall Street, not Main Street, we're hearing a lot more about these new financial instruments which nobody really understands, and less about the bread and butter. Hence this talk about the Great Depression, which is an economic equivalent of Godwin's law--dragging Nazis into a political conversation. An extremist analogy that grinds intelligent thinking to a halt.
But I think there's another level of factors we should be paying attention to, that does have to do with the "real economy," that is pretty scary. I'm talking about the two-decade, unsustainable trend of stagnant household earnings and increasing household debt. Consumer spending can't recover unless wages go up and people are able to pay down debt. But wages tend to go down in economic climates like this one. And borrowing more to get out of this mess
is just plain unsustainable.