Can medicine cure mental illnesses?

The following claims are all expressions of personal belief as it is formed by personal experience. If you know I'm wrong you're welcome to correct me.

From personal experience I am inclined to state that depression is a mental deflation that occurs as a result of unfulfilled dreams being neglected.

But how can medicine remedy that?

Psychosis is a state in which behaviour alters dramatically due to changes in reality perception. Too strong emphasis on some aspects, neglect of others, erroneous interpertation on still others create a perception of reality that lacks coherency and reason.

But how does haldol correct that?

Angst is basically fear that has no known cause. In a way it is invisible, and therefore much more potent that the fear we feel and know the source of, like a barking dog charging or heights or terrorism.

But how can pills tell you what you're afraid of?

Generally speaking, all drugs that are intended to cure these mental illnesses have no healing effect on the actual problem. All these medecines can do is numb the central nevesystem in different ways and thereby decrease the illness' capacity to act out. By lowering the "resolution" of reality the problems become bearable. But not solved.

I am not saying that medicine useless in these situations, but I am thinking of all the people I know who are forever muted, addicted to the drug perscribed to heal them and deprived of both strength and oportunity to heal themselves.

Maybe these mental disturbances are not illnesses in the normal sense, but healthy reactions to a sick world.

What say ye?