It began as the "subprime crisis" in 2007, and then mushroomed into a full-blown global recession in 2008. And still, despite mammoth government intervention, the bad news keeps getting worse. Are we now teetering on a precipice, ready to plunge into another Great Depression? Can the latest proposals pull the economy out of its nosedive?
There is plenty to worry about. But while many experts say this crisis is the worst since the Depression, that does not mean it will be as bad.
Unemployment and other economic gauges will continue to worsen, but unless governments make a major misstep, like igniting a worldwide trade war, economies should stabilize and recover on a "very flat path" that could take several years, says Wharton finance professor Marshall E. Blume.
Japan went through a similar bank crisis in the 1990s without tumbling into a full-blown depression, adds Wharton finance professor Jeremy J. Siegel. "Given that we're reacting faster than Japan, I think you can make a good inference that [a depression is] not going to happen here," he says.
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