[Blitzer:] Stocks surged today after the Federal Reserve slashes a key interest rate by three quarters of a percentage point. The Dow Jones Industrial Average gained 420 points its best day in five- and-a-half years. But there's still deep concern about the shape of the overall U.S. economy. Let's go to Mary Snow. She's looking into the story for us. Is today's news enough to quell fear of a recession Mary?
[Mary Snow, Cnn Correspondent:] Wolf, the short answer is no. The rally today signaled some relief on Wall Street, but it doesn't erase fears about the overall economy. Economists say they see hope, but say the government needs to do more to help alleviate the housing crisis, which is just one part of the overall picture.
[Snow:] The Federal Reserve has stepped in again to help boost the economy by slashing interest rates. The president is working to calm nerves.
[George W. Bush, President Of The United States:] In the long run, Americans ought to have confidence in our economy.
[Snow:] But that confidence was shaken when the Federal Reserve had to bail out investment bank Bear Stearns in the first move of its kind since the Great Depression. Nobody is predicting a repeat of history, but one economist won't completely rule it out, either.
[Peter Morici, University Of Maryland:] There is a possibility we could have a depression. We could be looking at 1929. I am not forecasting that and I don't want to be represented as such. But the dangers are real and apparent.
[Snow:] Many economists predict those dangers will be contained, saying the Federal Reserve has learned from mistakes of the past, even highlighted in a recent study on its Web site. Its chairman, Ben Bernanke, is considered an expert in the era of the Great Depression.
[Alan Blinder, Economist, Princeton University:] We're not on the precipice of the Great Depression. But we're facing similar problems, certainly problems in the financial system we haven't seen in the post-World War II era.
[Snow:] Former vice chairman of the Federal Reserve Board of Governors, Alan Blinder says there's one slice of the economy where the word depression is justified the housing sector.
[Blinder:] If you look just inside the small sector of the economy it's about four percent that is housing building houses. They're back in the Great Depression.
[Snow:] Some are calling on the federal government to bring back measures that could stem foreclosures.
[Lyle Gramley, Former Federal Reserve Governor:] I don't think any of us have any cookie cutter solutions to the problem. But we need to begin thinking outside the box, because what we're experiencing now in financial markets is unlike anything I have seen in more than 50 years of looking at the economy.
[Snow:] Now, economists point to a number of measures being considered right now that they believe could help, including a plan on Capitol Hill by Democratic Senator Christopher Dodd and Congressman Barney Frank to have government involvement to make mortgages more affordable. But those economists say the key thing right now is there needs to be quick action taken Wolf.
[Blitzer:] Mary, thanks for that. Mary Snow reporting. And, by the way, you can check out CNNmoney.com's special report, "ISSUE #1" from protecting your money to finding a job that's right for you. There's a ton of information that could save you a lot of money and a lot of misery. You can go to CNNmoney.com. And don't forget noon all of this week noon Eastern "ISSUE #1," our special one hour program on the economy with a lot of information you need to know. Most political analysts agree that America's economic problems and what can be done to solve them are likely to be at the front of the voters' minds when they elect a new president in November. Let's go to Brian Todd. He's been looking at the candidates' positions and their credentials when it comes to the economy, which, as we know, Brian, is issue number one. Here's the question: Which candidate is best poised to take advantage of this issue?
[Brian Todd, Cnn Correspondent:] Well, depending on who you ask, Wolf, it's either all of the above or none of the above when you look at these three candidates. And they've all formulated positions on taxes. They've all been grilled recently about home foreclosures. But actual hands-on experience, especially dealing with one economic crisis after another, well, that's another matter.
[Todd:] A mortgage meltdown, a credit crisis, oil skyrockets, the stock market slides and among America's top three choices for president, not one who's run a business or balanced a state budget.
[Larry Sabato, University Of Virginia:] They basically draw down their capital from their life experiences up to the point of going into the White House. You know, so it a concern. At the same time, I think it's also true that no one can really run a $14 trillion economy who hasn't been there and tried it.
[Todd:] John McCain does have two decades on the Senate Commerce Committee dealing with a broad range of issues. But one economist says for McCain, Hillary Clinton and Barack Obama, voting on an economic stimulus package may not be the best preparation for what's ahead.
[Lakshman Achuthan, Economic Cycle Research Institute:] As lawmakers, you know, there is this sense that you can take a decision, maybe even vote it into law, and then your job is done. And that's now how the economy works.
[Todd:] When the next president takes office in January, the U.S. may still be facing some tough economic problems. McCain wants to eliminate some taxes, reduce others and cut government spending. Hillary Clinton and Barack Obama want to raise taxes on the wealthiest Americans, while cutting them for low and middle income taxpayers. And they want to bail out struggling homeowners.
[Clinton:] You know, a moratorium on home foreclosures for 90 days.
[Todd:] But most economists would tell you the president doesn't sit there and pull levers running the economy. So what should we expect of the next president, with more market busting news looming on the horizon?
[Sabato:] Not specific expertise in the economy, as much as the good sense to surround himself or herself with real experts, people who understand the economic cycle.
[Todd:] Larry Sabato says that means people who understand what government can do to help the economy and what they cannot do. Now, one economic analyst told us a president who can act quickly but not rashly and at least project an air of decisiveness and confidence key there that will do more than you would imagine to at least start to revive the economy Wolf.
[Blitzer:] Brian Todd, thanks for that. He's only been governor of New York for one day, but he's already admitting to a secret. Coming up, the infidelity that's sparking the confession of the state's history-making leader. The bad news about the economy is hitting workers at one of the nation's biggest airlines. Coming up, Delta Airlines offers severance to half yes, half of its employees. You're going to find out what's forcing the move. That's coming up. Stay with us. You're in THE SITUATION ROOM.