Recovering from a ‘recession’ is not automatic. It requires external stimulus, from government in the form of deficit spending or from the central bank in the form of lower interest rates, or both. In the absence of such stimulus it is possible for the economy to fall into a downward spiral from which there is no means of recovery.

The Great Depression was precisely such an event. That’s when we learned about using government and the central bank to stimulate the economy. (At the time the focus was on government; it was in the 1950’s, after WWII, that Milton Friedman popularized the potential for the central bank to help ‘manage’ the economy.)

It is possible for recessionary pressure to be greater than the resources available to counteract it. The more debt that exists in the economy, the greater the downward pressure — like lead weights on a swimmer. Currently the debt of our (the U.S.) central government, alone, is 105% of the value of the total output of the economy.

So government is already fully involved in supporting the economy. The central bank is fully involved in supporting government. There is no institution available, like both government and the central bank were when the Great Depression occurred, to come to the rescue.