''Repression'' is the word economist Edward Yardeni coins to define the plight of the US economy, ''somewhere between a severe recession and a full-blown depression.''
Most experts, including Dr. Yardeni, rule out a 1930s-type depression, but they express concern about a situation that is more subtle.
''Structural damage'' to the industries that normally lead the nation out of recession--notably housing and autos--is a danger signal evoked by Yardeni, chief economist and first vice-president of E.F. Hutton.
The current recession might become so severe that major industries would be unable to grow even if interest rates fell and taxes were cut.
''The economy (in such a situation),'' says Yardeni, ''fails to respond because so many workers are out of work and so many businesses are out of business.''
Have we reached that point? ''If we do not have a quick break in interest rates,'' says Dr. Yardeni, ''then in two months we will be approaching that point.''
Housing and autos already are in depression, he says, and this is spreading to other industries, including the savings and loan associations--the principal source of home mortgage financing.
Former presidential adviser Barry P. Bosworth foresees ''drift''--a conflict between Congress, the White House, and the Federal Reserve Board over how to prod the economy toward recovery, without jeopardizing gains made against inflation.
''This is a dismal story for the financial markets,'' says Dr. Bosworth, ''but it does not translate into crisis. The brink is not out there.''
Still, says Bosworth, ''if unemployment goes over 10 percent in the economy as a whole, you are talking about quite a few parts of the US with jobless rates equivalent to the Great Depression level.''
''You are moving the actual suffering of people,'' he says, ''outside the realm of what we see ordinarily in recessions.''
A second element of risk noted by Bosworth, a senior fellow at the Brookings Institution, ''is a panic--say, people rushing to take their money out of the S&Ls.''
To forestall any such panic, White House and congressional officials are discussing the possibility of coordinated public statements, assuring Americans that their deposits up to $100,000 are safely insured, with the weight of the US Treasury behind the insurance.
''There should be no panic,'' says a high government official, ''if the public realizes clearly that their deposits would be guaranteed--even if Congress had to step in to bolster the FDIC and FSLIC (government insurers of bank and thrift deposits).''
Another high-ranking official, experienced in budgetary and banking policy, echoed the ''drift'' and ''repression'' concerns of Bosworth and Yardley.
''If we do not resolve the budget situation,'' he says, ''there could be a gradual deterioration of the economy. It would impede growth, stifle investment plans, and keep the jobless rate high. But it would not be a crisis of the depression sort.''
Resolving the ''budget situation,'' almost everyone agrees, means lowering the deficits of this and succeeding years - at least enough to convince Wall Street that it can allow interest rates to drop. Few experts, however, see much likelihood of trimming deficits until President Reagan agrees to reduce defense outlays, cut future entitlement payments, and postpone some tax cuts.
So far, while expressing willingness to cooperate with Congress, the President says that his defense program and tax cut program are out of bounds to lawmakers.
The budget impasse puts enormous pressure on the Federal Reserve Board to ease credit and bring down interest rates, lest the economy deteriorate further.
''If things get worse,'' says a well-known economist, ''there could be failures among nonfinancial firms, which could trigger a kind of panic.''
Bankruptcies, which are increasing, so far have spared nationally known firms , but Chrysler, Ford, several major airlines, and International Harvester are among famous corporations in trouble. So far, Fed officials hold firmly to a tight monetary policy--seeking in turn to exert pressure on Congress and the White House to shrink budget deficits.
''Once you have gone as far as we have in fighting inflation (the main reason for a tight money policy),'' says a member of the Federal Reserve Board, ''with all the hardship and suffering this policy has caused, to turn back now would be a major mistake.''