Hearing some of the dire predictions for an economy struggling to avert a financial collapse, it’s easy to recall 1930s photos of people huddled in soup lines or traveling the country for work and wonder what a depression would look like in the modern world.

Experts say that won’t happen. Yes, banks are failing and the stock market plunged Monday. And yes, there is genuine concern that regardless of the government’s $700 billion bailout proposal the United States still could land in a severe recession, with more business failures, higher unemployment, an even weaker housing market and depleted retirement savings.

But despite the alarms, including dire warnings from President Bush, economists insist there is no risk of a second Great Depression because, for some time now, the U.S. economy has been in the midst of a very different, less threatening phenomenon: “the Great Moderation.”

Coined by a Harvard economist earlier this decade, the term refers to a U.S. economy shaped by more flexibility and far less-volatile swings in growth. That flexibility, fueled by everything from financial deregulation and global trade to the shift toward a service economy, will keep the nation from sinking into a depression.

Read the full article here: Depression unlikely but a recession would hurt