How worried are you about a full-blown depression?

[Cafferty File]

March 5, 2009
How worried are you about a full-blown depression?
Posted: 12:32 PM ET

FROM CNN’s Jack Cafferty:

There’s a 20 percent chance the U.S. will sink into a full-blown depression according to a professor of economics at Harvard University who has studied the economic cycles of the last 139 years.

Robert Barro writes in the Wall Street Journal that the most serious concern these days is that our economic downturn will become something worse than the largest recession since World War II. And he comes to the conclusion that there’s a one-in-five chance that America’s GDP and consumption will fall by 10 percent or more — something we haven’t seen since the 1930s.

Barro found in his research that knowing a stock market crash has occurred sharply raises the odds of a depression — not good news for us, considering what the market has done since the fall of 2007 when the Dow was above 14,000.

However, he writes that the bright side of all this is there’s an 80 percent chance we can avoid a depression — pointing out how the U.S. had stock market crashes in 2000 and 1973 and both times only experienced mild recessions.

Nonetheless, in the 59 non war depressions Barrow studied across various countries, he found an average length of almost four years, which could potentially push back a recovery until 2012.

Here’s my question to you: How worried are you the U.S. will experience a full-blown depression?

Tune in to the Situation Room at 5pm to see if Jack reads your answer on air.

And, we love to know where you’re writing from, so please include your city and state with your comment.

http://caffertyfile.blogs.cnn.com/