On Capitol Hill, an entrepreneur capitalizes on, and captures, the spirit of the season. "Recession wreaths," the merchant writes on a marked-down Christmas wreath. A stroll past the gleaming storefronts in the heart of downtown Washington's usually booming K Street corridor finds going-out-of-business signs sprouting in the windows.

Elsewhere, similar signs of the times abound. On Fifth Avenue in midtown Manhattan, sales are down, already reduced merchandise prices are slashed further and taxi drivers who usually delight in racing past people trying to hail them complain of the worst holiday season business in years. "Down, down, down," says one disgruntled driver, gesturing vigorously toward the floor of his cab as he threads through noontime traffic. "Everyone's afraid now."

The same sense of new apprehension extends across the country as economic news continues to be disappointing. On this last weekend before the Christmas holiday, the question facing the United States no longer is whether a recession looms. The question is how long and severe the present one will be. Any lingering doubts about the reality of the nation's economic condition were removed Tuesday when the Federal Reserve cut a key interest rate for banks that affects all business nationwide.

Yes, we're in a recession, the Fed was implicitly telling Americans as it moved to try to stop the economic downturn by loosening credit and encouraging consumer lending and borrowing. Reinforcing that tough-times message was an accompanying announcement that the nation's biggest banking company would eliminate 8,000 jobs because of heavy losses it had incurred. At the same time, Citicorp announced that it also would substantially increase its reserves to cover additional future losses.

All of this would be bad news at any time, but the prospect of recession at home and war abroad simultaneously makes this moment even more unsettling. Not since the end of the 1930s has the nation experienced such twin specters, and perhaps not since then have events combined to create such pervasive uncertainty.

This first Christmas of the 1990s finds Americans in an introspective mood, looking neither backward to a prosperous past nor ahead with traditional optimistic belief in a golden future. It is Christmas present this year, a present with more than enough anxiety to form a collective feeling of gross national gloom and statistically crossed fingers.

That doesn't mean the nation is fated to repeat the horrors of the 1930s and battle both a great Depression and the advent of a great war. The current recession in no way resembles the devastating wreckage of the Depression era; it appears to be more classically cyclical in nature and hopefully will not remotely approach the conditions of the earlier period. And war, if it comes, does not threaten this time to engulf the entire world. But it does mean that this holiday season arrives amid unusual volatility and a national air of resignation rooted in the suspicion that serious problems lie ahead.

Adding to a sense of the inescapability, if not inevitability, of simultaneous war and recession are the words out of the White House.

In recent days, at virtually every opportunity, President Bush has been beating the drums of war more loudly and more incessantly. He has yet to spell out clearly and persuasively why his previous policy of waiting patiently for economic sanctions to work is no longer adequate. Nor has he adequately explained why doubling the U.S. military force in the Persian Gulf and canceling troop rotation plans don't deliberately increase the prospect of war rather than containment.

Bush's words this week suggest that he has virtually made the decision to wage war. He even tried to persuade Americans that, if war does begin in the Middle East, it will be short and decisive. "It is not going to be another Vietnam," he promised. Let us all hope so.

Perhaps this is bluff, a final strategem in the biggest stakes poker game of our times and designed to force Iraq's Saddam Hussein to capitulate. Or perhaps, as the president's tone and manner leads one to believe, it is a true indication that this president is bent on war and that war is inevitable.

Whichever, these events give new urgency to the timeless message of Christmas. As always, the prospect of real peace on earth remains more hope than reality, seldom more so than now.