A Layman’s Questions About the US Economy

Every day, I’m reading of stock market losses. 200-500 point losses each day. This cannot be good. And yet, I must admit I don’t understand the how and why of it all. And I don’t really have time to do the research necessary to grasp it well.

Before you judge, I am very busy with work, baby, and family. I get maybe an hour to myself each day when I’m not in traffic, and I typically let myself watch a show i’ve missed on Hulu.com. So I have a few questions that hopefully some of you economy pundits out there can explain to me. They’re very basic questions, but questions I bet many people don’t know the answers to.

1. Why does the stock market keep dropping each day? I understand that the $700 billion approved can’t just be applied overnight. I’ve heard that companies cannot get loans right now. Is that what the continued drops are all about? The lack of loans?

2. What will/could happen to the economy as the $700 billion is applied? Will that actually change the direction we’re heading?

3. Why aren’t more people talking about peak oil? America seems so vulnerable right now that it concerns me how few people know anything about oil except whether the price per barrel is currently up or down.

4. What is the technical definition of a recession? Is that where we are presently?

5. What is the technical definition of a depression? What does it take for the U.S. to go from recession to depression?

Comments are welcome.