The most pessimistic predictions are being shredded as economic reality bites

SHOOT: It says a lot when economists give 'pessimistic' predictions, and all of them prove to be too optimistic. Seems like everyone is on a holiday from reality, and the holiday destination is a place called 'Spin-it-better-than-it-is.'

The economic reality we're faced with, of course, is the 'D' word. No one wanted to utter - gasp - the 'R' word. But now that recession is a reality, so is a Global Depression.

What is a Depression? Unemployment or GDP (or both) that contracts 10%. In the USA, engine of the world economy, we're already at 10% unemployment.

clipped from www.forbes.com WASHINGTON -- When the Bureau of Labor Statistics reports employment figures Thursday morning, economists expect the U.S. to take a big step toward an ugly milestone. But economists' worst assumptions about employment are being surpassed monthly. In December, the Blue Chip consensus, a survey of many leading economic forecasters, pegged unemployment for 2009 at 7.8%. Even the 10 most pessimistic Blue Chip forecasters had an estimate of only 8.3%. By March, even the pessimists' estimates for the entire year had already been shredded, when unemployment reached 8.5%. The unemployment rate for June is expected to rise to 9.6% from 9.4% according to a Bloomberg survey of economists. Economists were wondering whether unemployment could possibly reach 10%, says Shierholz. But 10% is all but certain at this point. The question has changed to: "Are we going to pass the peak in 1983 that was 10.8%?" says Shierholz, which would be the worst unemployment rate since the Great Depression.