Forget all the talk about an economic recovery - the U.S. just might be headed in the opposite direction.
Paul Krugman - who has a Nobel Prize in economics - writes in the New York Times that he fears we are in the early stages of a depression.
Krugman says a failure of policy is to blame - that it's a mistake for governments around the world to raise taxes and cut spending at this time. Krugman says nations should be spending more to stimulate the economy.
And, at the end of the day - it is the unemployed and their families who will pay the high cost of this depression. Krugman writes about the "tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again."
Speaking of the unemployed - almost one million Americans are losing their unemployment benefits because the Senate failed to extend the deadline.
The bill didn't get the 60 votes needed to pass because lawmakers are looking for ways to put the brakes on skyrocketing deficits.
The same bill also contained another $24 billion for Medicaid funding for various states. And since they won't be getting that money right now, they will be forced to cut hundreds of millions of dollars, on top of what they've already cut.
It's getting very ugly out there.
Despite the Obama administration crowing about the so-called recovery summer - 78% of Americans say the economy is still in a recession according to a new CNN/Opinion Research Corporation Poll. Some recovery.
Here’s my question to you: Is the U.S. entering a depression?
Don writes from Canada, "As difficult as it is to criticize a respected economist like Paul Krugman, my common sense tells me the more government stimulus spending is a crazy notion. American and Canadian governments and bureaucracy at all levels have become too large, too costly, too inefficient. It's too easy to spend someone else's money. Drastically reducing government spending could hurt the economy in the short term, but it would set the stage for a bona fide recovery down the road."
Russell in New Hampshire writes, "It's clear, in order to survive a years' long depression we're going to have to attack the defense budget with a meat cleaver. A lot of generals in the pentagon will have to lose their jobs and the wars in Iraq and Afghanistan will have to be ended or sharply reduced. We have to care for our people, many of whom will never work again, and the costs of a few rockets will help play the unemployment bills."
Ron writes, "Though more spending is recommend by many leading economists to avoid a depression, I think finally the people and the financial markets may have figured out that this will only postpone the inevitable. You can not spend yourself out of debt. The baby boomers have lived nicely on borrowed money, and while they retire comfortably, the rest of us can start paying their bills."
Donald writes, "It's not fair nor is it going to solve the problem to only take food from the mouths of the poor. But until new non-regressive tax revenues are raised, the skies aren't going to clear. Two campaign pledges the president nailed on, removing us from Iraq and raising taxes on those making more than $250,000. Both would go a long way towards perking up the economy."
And Bud writes from Washington, "I bet a lot of working folks think the depression is already here, Jack. I have friends who have been out of work for two years. I'm fortunate. I work for an I.T. federal contractor. Our company is doing well. But the Washington metropolitan area is not the real world. People don't call it Disneyland east for nothing."