Recession might become depression, economist says

Raymond Robertson, an economics professor at Macalester College in St. Paul, Minn., says that the post-Depression financial system safeguards (many of them emasculated or gutted by bipartisan congressional and presidential action in the Clinton Administration) could fail to hold if a current recession got bad enough.

“Any of the potential shocks that we face could easily slip us into a very, very serious depression,” said Robertson. …

Robertson singles out the “astronomical” trade deficit, the decline of the dollar in favor of the euro and the national debt of $9.3 trillion.

“If they stop lending, we’re gonna have to repay that debt ourselves,” according to Robertson. “We’d have to cut spending, which could cause a depression given the scale. Or we have to raise taxes, which could cause a depression given the scale. Or the United States government would go into default.”

“We’re going to have to do some very serious sacrifice and work in order to correct these problems,” he added.

Consider yourself forewarned.