Recession= Cyclical Falure of capitalism Depression= Catastrophic failure of capitalism *
Since 1929 the answer has been a form of socialism ; eg: increased government spending (borrowed or printed money) formally known as Keynesian Economics, to resurrect a failed/failing system.
Franklin D Roosevelt led the way in the early 30s to counter the Great Depression and that Government spending was continued into WW2 when the Government dictated what was produced, when it was produced and by whom. Rationing was also implemented by the US Government (consumers limited to what they could buy which led to a Black Market)
Like Christianity, there is a great rift between the theory of Capitalism and its Practice leaving us with what is essentially a hybrid system since the 1930s; essentially a Welfare State.
* Despite the great depression and periodic recessions since then, most people believe in Capitalism but not in Communism which was discarded by the USSR when it failed once. Some might say, however, that it is still too early to say if Russia will nor resurrect Communism along the Chinese model but with "Russian Characteristics". I guess this opportunity may increase for Russia should te USA start to show signs of failure. It is interesting, that unlike the USSR, China managed to revive its system post the failed Mao attempt to industrialise China via the Soviet model. The USA is now confronted with this "Chinese Socialism with Chinese Characteristics" as a serious competitor to the US model.
