BBC business editor Robert Peston on the new welfare dependents.
BBC business editor Robert Peston
The Bank of England's central projection for growth is that the economy will contract at an annualised rate of about two percent some time around March or April of next year, which is when it thinks we will be at the bottom of this particularly horrible cycle.
However, Mervyn King, the governor, thinks I shouldn't really refer to a precise number for the projected economic decline, because so much may change in the coming weeks: the government may cut taxes; the Bank of England may reduce interest rates again; credit conditions could tighten (a bad thing) or could ease; and so on.
He would rather I simply pointed you to the Bank of England's website where you can find its new Inflation Report - and on page 7 of that slim but characteristically elegant publication you'll see a fan chart of a range of probabilities for our economic prospects.
The unambiguous message of this chart is that there will be a fairly painful recession in 2009, with the economy declining by perhaps 1.5% over the course of the year.
But it also shows the economy recovering in 2010 and storming ahead in 2011.
On that basis, the loss of output in this downturn would be less than the 2.5% shrinkage in the recession of the early 1990s.
Which some economists, such as Capital Economics, regard as too optimistic (Capital Economics is forecasting an overall contraction of 3%, which would make this recession worse than the last one).
Anyway, even on the basis of what some will see as King's relatively sanguine prognostication, it's reasonable to expect measures to stimulate the economy from the chancellor - a combination of tax cuts and public spending increases - in his forthcoming Pre Budget Report.
And because various other fan charts in the Inflation Report show that there is a serious risk of deflation - of prices actually falling - it would be a bit odd if interest rates weren't cut again.
All of which should lessen our economic malaise a bit.
However there is a big leap of faith in the Bank of England's forecast that the recession will be short and sharp and that the recovery will be bouncy.
The Bank of England is assuming that at some point in the next few months the banks will stop the remorseless and devastating process of reducing the amount of credit they provide and will also cease increasing the cost of loans for those perceived as risky borrowers.
But a gradual recovery in the volume of lending may start rather later than it expects.
Given that the governor himself constantly refers to the recent crisis in the banking system as "the most severe episode of instability since the outbreak of World War I", few can doubt that the confidence of bankers has been shattered.
Bankers now have a perhaps exaggerated fears of making losses and are reluctant to lend to any business or household which they perceive to be a potential victim of recession - which, of course, is one of those examples of fears that, if acted upon, become self-fulfilling.
Also the recent bail-out of the world's banks made them financially dependent on taxpayers to the tune of £5,000bn.
Bankers detest their transmogrification into the welfare dependents of our post-bubble age, and they are desperate to pay taxpayers back - which would be much easier, in theory, if they lent less and therefore had a correspondingly smaller need to borrow.
You only have to think about the way that Northern Rock has massively reduced the number of new mortgages it provides to see how the kind of rescues we've seen of banks may stop them from falling over, but - in spite of the rhetoric of the chancellor and the governor - doesn't provide them with a serious incentive to lend more, to free up credit.
In a way, the government has come off the fence about the rescue of our banks.
If the chancellor wants them to lend more to all of us, he probably has to persuade them that a state of semi-permanent nationalisation is a good thing - and that they mustn't even think about paying taxpayers back for many many years.
But if he wants to wean them off state support as soon as possible, he can't expect them to grease the wheels of the economy effectively, to end the contraction of credit that's been doing us so much harm.
Or to put it another way, if the chancellor wants to be confident that we will eventually bounce back with a vengeance from this economy misery, he and the banks may have to accept that massive taxpayer funding of the banks is the new norm, the new status quo.
This is an excerpt from Robert Peston's blog. The full version can be found by visiting the BBC News website or by clicking here.