Depression Fears Begin to Take Hold [View All]

[Liberal_in_LA]

Posted July 06, 2010

Depression Fears Begin to Take Hold

By Seth Fiegerman

Since the recession first started in December, 2007, it has often been referred to by economists and politicians as the greatest economic crisis this country has faced since the Great Depression. Yet, as menacing as this description may be, few ever dared to use D-word to describe the current economic crisis, at least until now.

Last month, Paul Krugman, a Nobel-prize winning economist and regular columnist at the New York Times, declared in an article that we are now in the midst of a depression. “We are now, I fear, in the early stages of a third depression,” he wrote. “It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.”

To support this astounding claim, Krugman cited as evidence our continued period of high unemployment and concerns that we may soon suffer from deflation. These fears are not new. In fact, we ran down a list of these and other concerns in a recent piece about signs that we may soon face a double dip recession. However, Krugman’s bold statements paired with more dismal job numbers may soon create a new narrative centered around the fear of another depression.

CNBC reported yesterday that stock markets around the world are showing signs of a “rapid collapse” that is very similar to the one that led up to the Great Depression.
http://www.mainstreet.com/article/moneyinvesting/news/depression-fears-begin-take-hold?cm_ven=msnetzero