2011, meet 1937. I guess we'll never learn that the exact wrong way to deal with a deflationary spiral is to go into full-on austerity mode.
Hopefully we aren't looking at another 1939 in a couple years, though the possibility of Europe completely falling apart on a monetary level is looking more and more likely. I was skeptical that the euro would disintegrate as recently as a couple months ago, but it's all but inevitable now, with the end of QE2 here and no further monetary or fiscal stimulus coming on either side of the Atlantic. The deflationary pressures are just too overwhelming at this point. Greece bails by the end of the year, and then it will just be a set of dominoes falling - Ireland will leave, Spain will leave, the French and Germans will have to bail out or nationalize their banks because of their huge exposure to southern Europe, etc, etc.
Not sure if Obama's toast at this point, because it depends on how fast everything happens and what the US response is.