Could we still face another Great Depression?

After months of cautious optimism, a flurry of disappointing financial news has prompted economists to warn that the recovery might be unraveling. The housing market has plunged into a much-feared double-dip; last week's payroll numbers suggested unemployment might be getting worse; Europe's debt crisis is fueling global uncertainty; and federal stimulus programs are drying up. Did Americans set aside their fears of a Great Depression-like meltdown too soon?

Complacency has pushed us to the brink of disaster: The devastating May jobs report made it clear the economy needs another stimulus, says Dean Baker in The New Republic. But the GOP-controlled House is trying to cut government spending, rather than boosting the economy by increasing expenditures. Washington acted decisively in 2008 with TARP and other special lending programs that "saved us from a second Great Depression." Looks like we won't be so lucky this time.

"Disaster not averted"

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It's government meddling that's to blame for our economic mess: If anything, government intervention made the jobs recession worse, says Larry Kudlow at RealClearPolitics. The Federal Reserve's "boneheaded" efforts to pump money into the economy created no jobs, only inflation. And the Obama administration's "economic policies that threaten higher taxes and regulations" scared small business owners out of taking risks, and creating jobs. We're in trouble unless the GOP has ideas that will make mom-and-pops "roll up their sleeves once again."

"Obama's jobs recession"

Actually, this is what the recovery should look like: "Given the scope of the financial meltdown, it's hard to imagine things could have been much better than they are now," says Peter Siris at the New York Daily News, "and very easy to imagine things could have been much worse." Back in 2008, the government wanted to ward off total panic, and downplayed how bad things really were. So now, everyone expects a "robust recovery." But we're climbing out of "a complex mess that was decades in the making" — it's going to take time.

"U.S. economy is on the mend even though recovery is slow, government didn't reveal full damage"