As our massive economic downturn enters its fourth year, demoralized citizens nationwide are questioning whether our “great recession” is actually a full-blown depression.

Webster’s Dictionary defines a recession as “a period of reduced economic activity”, and a depression as “a period of low general economic activity marked especially by rising levels of unemployment.”

Rising levels of unemployment? According to Mort Zuckerman, Editor-In-Chief of US News and World Report, in his 6/20/2011 article “Why The Jobs Situation Is Worse Than It Looks”:

“In the face of the most stimulative fiscal and monetary policies in our history, we have experienced the loss of over 7 million jobs, wiping out every job gained since the year 2000. From the moment the Obama administration came into office, there has been no net increases in full-time jobs … Total payrolls today amount to 131 million, but this figure is lower than it was at the beginning of 2000, even though our population has grown by nearly 30 million.”

The unemployment rate remains at 9.1%, with some estimates — but, when you factor in the millions who have stopped looking for work — the unemployment rate exceeds 16%.

Those stimulative fiscal and monetary policies have compounded another problem contributing to our economic woes: an out-of-control federal budget deficit. Since President Obama took office in 2009, the federal deficit has grown by $3.5 trillion, with 41 cents of every dollar spent being borrowed.

Further, the Congressional Budget Office (CBO) estimates the US’s ratio of debt-to-GNP (gross national product) will be 69% in 2011, and expand to 101% in 2021 if current policies aren’t altered.

Obviously, a debt crisis of this magnitude does little to generate the consumer and investor confidence necessary for economic recovery. Nor do three wars, collapsing home values, rising food and gas prices, and increasing inflation, foreclosure rates and personal bankruptcy filings. Not to mention the fact that the European economy is in even worse shape than ours.

So, are we in a recession or a depression?

Ronald Reagan answered this question brilliantly during his 1980 presidential campaign. In describing similarly dire economic conditions he said, “A recession is when your neighbor loses his job; a depression is when you lose yours; and a recovery is when Jimmy Carter loses his.”

Let’s just hope the recovery has begun long before we follow Reagan’s advice in November 2012.