"This is going to be one of the worst economic downturns since the Great Depression," said Stiglitz. (Nobel Prize Winner 2001/Columbia University professor)

He explained that the main cause of the current situation is historically unique—and thus is befuddling those charged with creating solutions.

Other downturns were primarily caused by excesses in inventories or inflation; but this slowdown is due to the condition of "badly impaired" banks and financial entities, which are unwilling and/or unable to lend capital -- stymieing the very borrowers who usually drive the country back to vitality, Stiglitz said. And the Federal Reserve may have used up its ammunition -- and the faith investors and planners have put in it."

Stiglitz co-hosted CNBC this afternoon for a couple of hours. How they let his bearish self in and on for so long is quite remarkable given CNBC's usual obsession with optimistic only, bullish guests.

The interview is worth watching here.   more »