Even before Capitol Hill shocked the world's financial markets this week, the global economy was already mired in difficulties. And whether or not some version of the bail-out package gets passed in the near future, extricating it will be a real struggle.

So far the more optimistic forecasters think any global recession will look somewhat like the last retrenchment in 2001 - a relatively shallow downturn that ended when economies responded to rapid cuts in interest rates.

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But unless global credit markets unfreeze and start lending again, the much deeper and more prolonged recession that many suffered in the early 1990s will look increasingly possible.

Irrespective of the events on Capitol Hill, even relatively cheerful forecasters have sharply revised down near-term expectations for the US economy. Data showing stagnant consumer spending in real terms in August, following falls over June and July, raised the prospect of the economy slowing to a halt.

Macroeconomic Advisers, a respected economic forecasting firm based in St Louis, this week sharply revised down their projections in the third quarter of the year, saying that growth at an annualised rate was more likely to be in the 0-0.5 per cent range than their previous estimate of 1.5 per cent, and that the economy would likely contract in the fourth quarter.

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Chris Varvares, president of Macroeconomic Advisers, says that even if some version of the bail-out plan is passed later this week it will likely be too late to arrest the downturn, with the distress in credit markets having already done irrevocable damage.

"Without the EESA (Emergency Economic Stabilisation Act) or something like it, we could see a much sharper decline," he says.

And economists warn that the same woes that are besetting the US economy - a general contraction in lending, worsened by dysfunctional credit markets and falls in house prices - are also threatening the world's other large engines of growth.

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George Magnus, senior economic adviser at the investment bank UBS, says that there are common patterns in the Organisation for Economic Co-operation and Development, the club of rich countries.

"About 40 per cent of the OECD economies are in effect already in recession," he says. "It all comes back to the big D - deleveraging."

Banks and mortgage companies are cutting back on lending across the board, including to smaller and medium-sized enterprises that have fewer problems with their own balance sheets. "Even the SMEs that don't have this leverage are being hung out to dry," Mr Magnus says.

Within the European Union, Ireland and Spain, which had their own property bubbles, are particularly vulnerable to weakness.

The eurozone economy as a whole contracted in the second quarter of the year and indicators suggest little if any improvement since then. Economic sentiment in the eurozone was at its weakest in nearly seven years in September.

And although Japan among the big industrialised economies has been the least affected by the financial stresses arising from reckless mortgage lending, the Japanese economy has little independent momentum. With export demand softening rapidly, it too contracted in the second quarter of the year, with higher commodity prices eating into real incomes.

The emerging giants such as China, Brazil and India have been even less affected by the travails in global credit markets. But they are likely to be vulnerable to a slowdown in the real economy.

Many of them, particularly China, have remained dependent on export growth. Their relative lack of financial sophistication has insulated them from the financial crisis but will impede their ability to borrow and spend to generate domestic demand.

During the past 20 years there have been two other times when much of the world economy was in recession: 2001, in the aftermath of the collapse of the technology bubble, and the early 1990s, as the long boom of the 1980s came to an end and inflation had to be squeezed painfully out of the system.

Opinion is divided as to which scenario is currently more likely.

Mr Varvares at Macroeconomic Advisers thinks that the US at least is currently heading for something more like the 2001 slowdown. Assuming that financial markets return to some sort of normality, he says, there could be a big boost from equity prices, which look undervalued at the moment.

Mr Magnus tends to the pessimistic side. "What got us out of the hole in 2001 was that it was possible to cut interest rates very sharply," he says.

"And there was a sector that was willing and able to crank up leverage - the household sector.

"Apart from the government, which is going to have to come in and offset the weakness in private borrowing and demand, I can't see anyone in a position to spark an economic renaissance."