Economist Gary Shilling, who correctly predicted the current downturn, isn’t afraid to utter the dreaded “D” word.

“There’s no formal definition for depression,” he tells Bloomberg TV. “But we’re getting awfully close.”

The entire financial system and economy are at risk, Shilling says.

“The longest post-war recessions so far lasted 16 months: 1981-82 and 1973-75,” he points out.

“If this one lasts through the year, it’s 24 months. If it goes through next year, and it might, that’s three years, and you may as well call it what it is — a depression.”

Depression or no, “we’re certainly in the most severe recession and financial crisis since the 1930s,” Shilling says.

Three important problems need to be fixed before the economy can recover, he argues.

“One, there is a huge excess of housing inventory,” he says.

“Two, we need to stabilize the financial sector — not just residential mortgages but consumer borrowing, credit cards, commercial real estate, and non-real estate junk securities.”

Finally, Shilling says, “we need enough fiscal stimulus to make an effect. What we have so far, only $200 billion of the $787 billion is actually going to put people to work or put money in circulation with unemployment benefits.”

Others agree about the dire state of the economy.

After Friday’s employment data, IHS Global Insight economist Nigel Gault told the Associated Press, “There is no light at the end of the tunnel. Job losses were everywhere, and there's no hope for a turnaround."