OhMyGov! Recently asked its readers if they believed the U.S. was in a recession or depression and 91 percent said yes, the country was in real financial distress.

The full results are as follows:

• 45% said "absolutely," we're in a recession, hence my stocks all crashing.
• 29% said "No," but we're close to a recession.
  
• 17% thought we had skipped right over recession and gone to a depression.
• 9%, the optimists of the sample, said "Not a chance, the U.S. is resilient!" and has not entered a recession or depression. Fiction can be fun!

But are we really in a depression or a recession?

There is an old joke that states: "A recession is when your neighbor loses his job and a depression is when you lose your job."

However, for you academic types: a recession is a decline in the Gross Domestic Product (GDP) for two or more consecutive quarters and a depression is a recession that lasts longer and has a larger decline in business activity.

For those who have a 401(k), a mutual fund or a college savings plan, the falling stock markets and depressed home market have translated into a loss of money, it is a paper loss. But if you need cash now, this is as real as money gets!

So is this the start of another Great Depression as the daily news and financial pundits will have us believe?  Not really

The Great Depression resulted from a series of economic and financial shocks - the end of a housing bubble in 1926 and the end of a high-tech bubble in 1929 - not to mention truly breathtaking neglect and incompetence on the part of policymakers. Unemployment was over 25 percent and thousands of banks failed.

Does this sound like today? Not quite.

Currently, unemployment is floating around 6 percent, thousands of banks are not failing, the Federal Reserve has not tightened, there continues to be pervasiveness in 401k investing, and we have an FDIC and social security. 

OK, what about a recession then? 

A recession is defined as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales." Given that unemployment is up, retail sales are down, and incomes are down. Conversely, GDP is actually up 2.8 percent, thanks to cheap exports that stemmed from a falling dollar and a government sponsored economic stimulus plan.

Even with GDP artificially propped, the falling real estate prices, stock market, and job rates all point to a big recession cloud looming over the states. And if you cant see it, you're probably too close to the Penthouse suites.

Our government has reacted to the problem. First, it provided funds to the commercial banks.Then, it targeted broker-dealers. Now, it is desperately propping up the commercial paper market. All the while, the problem has been infecting new parts of the financial system while investors around the country wait for an announcement we've hit bottom.

So what should you do?

For those obsessive compulsive types that track their investments by the minute and watch the housing market daily, thinking of that potential money as the same thing as the cash in your purse or your checking account is a big mistake and will drive you crazy.

The enactment of the Emergency Economic Stabilization Act of 2008 temporarily expands federal insurance for bank and credit union deposits from $100,000 to $250,000 until the end of 2009.  So your real money - the dollars in your checking and savings accounts - is safe if you're using a financial institution insured by the FDIC or NCUA.

And if you don't need the money now or need to move from your home immediately, ride the storm out. History always repeats itself and the market will recuperate, but perhaps this is an opportunity to reflect and learn. That is, don't put all your eggs in one basket, diversify and be cautious with your investments.  Live within your means and always save for a rainy day.

Other OhMyGov! Polls:

[+] OhMyGov! poll results in: Readers say 'hell no!' to government bailout

[+] OhMyGov! poll results in: Supervisors are lacking in skills