Our FLYPside editorial explores whether or not America is ready to come to terms with the current economic downturn

Watch our FLYPside editorial, which this week discusses how the country is seeing its economic downturn.

Economists are still debating whether or not we are in recession. If
yes, when did it start? If no, can the economy continue to defy gravity?

Whatever you call it, most people already live in a world of falling
production, disappearing jobs, soaring fuel and energy costs and
stagnant incomes. Since January, 353,000 factory workers have lost
their jobs. For months the government has been the only sector able or
willing to hire. In June, almost 10 percent of Americans were
unemployed or unable to find full-time work.

The housing crisis-which triggered the downward economic
spiral-rolls on. Foreclosures now exceed 250,000 per month and housing
prices are in free fall. This has three effects. First, more than half
a million construction jobs have disappeared during the past two years.
Second, more and more people are either losing their houses or having
trouble paying their mortgages. Third, falling house values mean that
almost everyone feels at least a bit poorer.

The two economic indicators that most people feel or at least hear
about everyday are both in dangerous territory. The price of gasoline
continues to rise and now averages $4.11 nationwide. And, the stock
market is down more than 20 percent from its peak.

That decline, along with continuing losses throughout the financial
system, is contributing to a renewed sense of gloom in the markets that
seemed to have calmed after Bear Stearns was rescued.

Put it all together, and Americans are scared...for good reasons.

For its part, the government has done the two things the textbooks
tell it to do: cut interest rates and write checks. That seems to have
put a fragile floor under the economy that should last through the
summer, but not much longer.

Fair or unfair, most people blame Bush for the economic mess, which
is yet another burden Republican candidates will have to bear this
fall. But the cheerleader in chief has made things worse by largely
ignoring the economic realities and anxieties that define most people's
daily lives, and by refusing to discuss real solutions.

The fact is that what ails the economy can only be solved by
fundamental changes in tax, energy, health care and spending policies.

We need incentives to save, produce, innovate and invest-instead of
incentives to consume and dodge taxes. We need to revamp the financial
system by requiring banks to carry more reserves, take less risk and
manage their books with transparency. And we need to renew the
government's role as an effective regulator, whose first responsibility
is to consumers, not to industry.

None of that can happen fast, certainly not before the new president
and new congress take office. But meanwhile, the country should have a
realistic debate about what caused and how to solve the economic
problems.

Let's start by calling a duck a duck.