Today's gospel, the healing of the man among the tombs, touches one of the most difficult topics we deal with as people of faith. Once more we find that what our church actually teaches is the middle point between the tow extremes.
In the time of Jesus most mental and some physically illnesses such as epilepsy were understood solely as signs of demonic possession. Jesus did not step into that world and introduce 20th century psychologically, but responded in the idiom of the people.
Jump to the late 20th century, and we get the other extreme, those who want to reduce every problem to some form of mental illness or medical condition. Witness our own story from VA Beach of the young man whose suicide has brought the over diagnosis of ADHD and the drugs associated with it into the national consciousness. A pill is not the answer for every problem.
Both extremes, as extremism usually does, lead to the false dilemma. The first century was wrong, and much of the 21st century is wrong.
The Catholic Church in dealing with the human person recognizes that there are three aspects to every person: body, mind, and soul. Like most good scientists, the Church would have us look to the simplest answer first.
Do we still have a rite of major exorcism? Yes. But, it is only to be used by those priests, specifically chosen and trained for this ministry. Additionally, the Church teaches that before it is employed, medical and psychological avenues should first be explored to explain the situation in question. Your first thought, when someone is experiencing auditory hallucinations, should not be "The devil did it."
There are those situations where we do believe that we can dealing with what might be call spiritual illness. If we accept that the human being has a soul how can we reasonably dismiss that aspect of the person in dealing with their overall well-being. In this I would argue the Church takes the most liberal, broad-minded position, and those who would accept only the medical or psychological are the narrow minded.
As always it is a matter of balance.