Is this a recession, or a depression?

Everybody wants to know how low the economy will sink, said Robert J. Barro in The Wall Street Journal. Will this be the worst recession in decades? “The bottom line is that there is ample reason to worry about slipping into a depression.” There's probably a 1 in 5 chance that per-person gross domestic product will fall by 10 percent, which hasn’t happened since the 1930s.

Only “monetary shock and awe” can keep us out of a depression now, said Ambrose Evans-Pritchard in Britain’s The Telegraph. Fiscal stimulus won’t be enough. It may be that to prevent the Dow from crashing to 4,000 by summer the Federal Reserve might have to engineer a “quantum reduction” in mortgage rates, to 2.5 percent.

There’s no doubt we’re on a slippery slope that leads toward 1933, said Steve Forbes in Forbes. At this point, “either Washington will let the banking system go into cardiac arrest”—and a repeat of the Great Depression will be upon us—“or it will take measures to bring it take measures to bring it back to life so the economy can function again.” The Obama administration’s only choice is to do whatever it takes.

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