Who knew that Paul Krugman, the economist and New York Times columnist would emerge as a voice of doom? Mr. Krugman, who has recently been arguing the necessity of continuing stimulus spending at a time when the global economic recovery is weak, is - to put it mildly - disappointed by the G-20's commitment of deficit reduction.
Indeed, he believes the world is now at the threshold of an all-out depression with spending cutbacks coming at the worst possible time for the economy.
"Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline - on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses," he said in a Monday column in the New York Times.
"We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost - to the world economy and, above all, to the millions of lives blighted by the absence of jobs - will nonetheless be immense.
And this third depression will be primarily a failure of policy. Around the world - most recently at last weekend's deeply discouraging G-20 meeting - governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending."
It will be interesting to see which way stock markets go on this development. So far on Monday, in mid-morning trading, indexes seemed to be reflecting a giant shrug on the part of investors, with stocks little changed.