Did G20 leaders blow it?

G20 blew it, leading economist says

Workers remove broken glass at a store on Yonge Street after anti-G20 protests in Toronto, on Monday, June 28, 2010. THE CANADIAN PRESS/Adrien Veczan/

Semitic illegal drug calls Khat spreads in North

America and Europe

By Julian Beltrame, The Canadian Press, thecanadianpress.com, Updated: June 28, 2010 6:45 PM: Workers remove broken glass at a store on Yonge Street after anti-G20 protests in Toronto, on Monday, June 28, 2010. THE CANADIAN PRESS/Adrien Veczan.

OTTAWA - Beware a repeat of the 1870s and 1930s depressions.

The morning after leaders of the big economies called for bitter medicine to cure the world's ills, many analysts said the prescription will lead to slower growth and at least one prominent economist said it could trigger a depression.

The alarming analysis came from Nobel laureate Paul Krugman, who argued in the New York Times that by turning on a dime from stimulus to restraint, governments are threatening to turn a recession into a full-fledged depression.

"We are now, I fear, in the early stages of a third depression," Krugman writes. "And this third depression will be primarily a failure of policy. Around the world ... governments are obsessing about inflation when the real threat is deflation."

The other two recorded depressions — lengthy and deep economic contractions — occurred in the 1870s and the 1930s.