A 5 percent chance of another Great Depression?

Brad Delong thinks so, and despite the improving economy, that estimate is up from a few months ago:

For 2 1/4 years now I have been saying that there is no chance of a repeat of the Great Depression or anything like it -- that we know what to do and how to do it and will do it if things turn south. I don't think I can say that anymore. In my estimation the chances of another big downward shock to the U.S. economy -- a shock that would carry us from the 1/3-of-a-Great-Depression we have now to 2/3 or more -- are about 5%. And it now looks very much as if if such a shock hits the U.S. government will be unable to do a thing about it.

Importantly, DeLong isn't concerned by changes in the country's economic condition. He's scared by the revealed constraints on the political system's ability to respond to changes in the country's economic conditions. The issue isn't that some storm will unexpectedly slam into the economy and there will be nothing anybody can do, but that the storm will hit and Congress will choose to do nothing.

The biggest danger America faces is not rising health-care costs or global warming or the budget deficit. It's the political system's inability to act on these issues, even though the solutions are generally quite clear. As any uninsured person will tell you, the fact that medicine exists doesn't do you much good if you can't get any of it.