A bad couple of years, or a bad decade?

You have heard that Fannie and Freddie, their gentle names however, may cripple the financial system without a large extract of taxpayer money. You have gleaned that jobs are disappearance, housing terms are plummeting, and paychecks are efficaciously shrinking as food and energy prices soar. You have noted the disturbing talk of crisis hovering over Wall Street.

Something has clearly gone wrong with the economic system. But how bad are things, really? And how bad might they get earlier better days tax return? Even to many economic expert who late thought the gloom was overblown, the state of affairs looks grim. The economic system is in the midst of a very rough patch. The worst is likely still ahead.

Job losses will likely accelerate through this year and into 2009, and the job marketplace will likely stay weak even thirster. Home terms will likely keep falling, shrinking family wealth and erosion spending power.

"The open inquiry is whether we're in for a bad couple of years, or a bad decennary," said Kenneth Rogoff, a former chief economic expert at the International Monetary Fund, now a prof at Harvard University.

Is this a recession?

Officially, no. The economic system is not in recession until a panel at a buck private institution called the subject Bureau of Economic Research says so. On the side, many economic expert think a recession started six or seven calendar month ago, even as the economic system has continued to expand — albeit at a tepid pace.

Many assume that if the economic system expands at all, then it isn't a recession, but that's not true. The agency defines a recession as "a significant decline in economic activity spreading across the economic system, lasting more than a few calendar month." If sufficiency people lose their jobs, factories stop devising things, shop stop merchandising things, and less money lands in people's pockets, it is probably a recession.

Whatever it is called, it is a painful time for tens of millions of people. Indeed, this may turn out to be the most wrenching downturn since the two recessions in the early 1980s; almost surely worse than the recession that ended the technology bubble at the beginning of this decade; perhaps worse than the downturn of the early 1990s that followed the last dip in real estate prices.

But, despite what some doomsayers now proclaim, this is not the Great Depression, when unemployment spiked to 25 percent and millions of previously working people woke up in shantytowns. Not by any measure, even as your neighbors make cryptic remarks above dusting off lessons passed down from grandparents about how to turn a can of beans into a family meal.

How bad is housing?

Bad in many markets, awful in some, and still O.K. In a few.

The downturn has its roots in the real estate frenzy that turned lonely Nevada ranches into suburban ranch homes and swampland in Florida into condominiums. Speculators drove home prices beyond any historical connection to incomes. Gravity did the rest. After roughly doubling in value from 2000 to 2005, home prices have fallen about 17 percent — and more like 25 percent in inflation-adjusted terms — according to the widely watched Case-Shiller index.

Even so, most economists think house prices must fall an additional 10 to 15 percent to get back to reality. One useful measure is the relationship between the costs of buying and renting a home. From 1985 to 2002, the average American home sold for about 14 times the annual rent for a similar home, according to Moody's Economy.com. By early 2006, home prices ballooned to 25 times rental prices. Since then, the ratio has dipped back to about 20 — still far above the historical norm.

With mortgages now hard to obtain and speculation no longer attractive, arithmetic has replaced momentum as the guiding force for housing prices. The fundamental equation points down: Even as construction grinds down, there are still many more houses on the market than there are people to buy them, and more on the way as more homeowners slip into foreclosure.

By the reckoning of Economy.com, enough houses are on the market to satisfy demand for the next two-and-a-half years without building a single new one.

The time it takes to sell a newly completed house has expanded from an average of four months in 2005 to about nine months, according to analysis by Dean Baker, co-director of the Center for Economic and Policy Research.

And many sales are falling through — more than 30 percent in some parts of California and Florida — as buyers fail to secure financing, exacerbating the glut of homes, Baker said.