From: Prison Planet
Professor Peter Morici, a former chief economist at the U.S. International Trade Commission, has become one of the first senior economists to admit that the U.S. is facing a 1930’s style depression.
Noting that 2.6 million payroll jobs have been lost since December 2007, Morici told financial publication Kiplinger that a 5 per cent contraction in the fourth quarter made the crisis “worse than a recession”.
“The economy will not recover without fundamental changes in banking and trade policy,” said Morici, an economics professor at Maryland University, “A large stimulus package, though necessary, will only give the economy a temporary lift,” he added. “The economy is in a depression, not a recession.”
A trickle of prominent analysts are now saying what people like Alex Jones and Peter Schiff were being called doomsayers for predicting over a year ago, that the U.S. faces a crisis on the scale of the 1930’s if not worse.
Morici’s summation dovetails the analysis of renowned financial publication The Economist, which reported earlier this month that, based on the characteristics of the current financial crisis, the U.S. is in a depression, not a recession.
On December 23rd, the IMF’s top economist, Olivier Blanchard, warned that falling confidence could turn a recession into a depression if market sentiment continued to dwindle.