Is The Sky Falling? Two Views

If you need a fix of doom and gloom, here's where to go: an August 25 CounterPunch article by Mike Whitney, The Dumbest Rally Of All Time. Everything's bad, Obama is doing exactly the wrong things, the eurozone is toast.

The recovery was stimulus. Absent the stimulus, there is no recovery. Credit is not expanding, households are still deleveraging, business investment is way off, and aggregate demand is weak. In other words, the economy is dead-in-the-water. Without sustained government spending to shore up the flagging economy, recession is inevitable. But policymakers—led by Obama–refuse to budge. They remain fully committed to their bad ideas.

The real problem is political, and it is profound. Unless we can unseat the class that sees the world only through its portfolios, they may well take us all the way down. Unfortunately, no one seems to have a clue how such a revolution can be engineered in a modern, complex, transnational economy. (“It’s the Political Economy, Stupid!”, Peter Dorman, Econospeak) 

If you'd prefer a forecast that's a little less bleak (based on the premise that economic forecasters might as well consult tea leaves or chicken bones, and that things are so bad already they can't get much worse), there's Why The Double-Dippers Are Wrong, by Dean Baker, also at CounterPunch. But it isn't rosy:

However, the fact that a double-dip is not likely does not mean that we have good economic news on the horizon. All the signs point to several years of weak growth. At best the economy is growing at the 2.5 percent rate needed to keep pace with the growth of the labor force, and it may be growing more slowly. This would mean that the unemployment rate will rise from its current 9.1 percent rate.

This is in fact a truly awful picture. After severe downturns in the 70s and 80s the economy came roaring back, growing at 7-8 percent annual rates in peak quarters. This is the sort of growth that is necessary to quickly bring the unemployment rate down to more tolerable levels.