Nobel Prize Winner: Fears we are in the early stages of a depression

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.

http://caffertyfile.blogs.cnn.com/2010/06/28/is-u-s-entering-a-depression/?hpt=T2