How long do you think it will take the U.S. economy to get out of it's slump?

Different segments will take different times. For the housing industry, never.

I think it depends on whether the politicians feet are held to the fire until they do something to stimulate the economy in a large-scale way.

It has to happen on it’s own without interference. Probably 12 years until we can see improvement in all sectors.

This thread should come with a disclaimer: Do not read while near sharp objects. :^(

Seriously though, my real estate attorney cousin-in-law agrees with @YARNLADY on the housing market. It’ll never recover to where it was.

Which is technically good as it was way overinflated, but leaves a lot of homeowners with little to no equity if not completely under water.

Depends. Will we be allowed to jumpstart it, or are we going to be stuck collecting pop cans for stimulus money?

4 years ago I was skimming almost $600 a month in interest off my savings as ‘passive’ income. Now it’s about $45.
Oh, those were the days. I think our ships been sunk for quite awhile…hold on loosely, it’s ALL temporary!

I mean, as in, easy come, easy go. ;-)

I think it’s already beginning. I am in HR and my primary task is recruiting. A few months ago I was sifting through 300 positions per resume. Lately, for some positions, it’s down to 100.

A few months ago when I made a job offer it was “OMG, thank you, I’m so excited, I am so grateful to be hired by such an awesome place.” Lately it’s more like, “Can I think about it and call you by Friday,” or “Well I was thinking XX.XX dollars,” no holding back! LOL

If we continue the way we’re going, perhaps never. If we listen to those who see a way out, perhaps ten years. : ((

It will be a very slow recovery till the inventory of repossessed homes is brought down to an average level and the homeowners currently under water in their mortgages get back to having more equity in their homes than money owing on them.

After what I heard from Republicans in their Presidential debate tonight, if we put them back in the drivers seat, we’ll be heading into a full-blown depression in short order. The consensus there seems to be we have to return to the same failed policies that drove the economy over the cliff in 2007. If we do the same things again, we’ll get the same results again.

The only thing holding back the economy is lack of confidence. The problem is that the more people lack confidence, the less risk they are willing to take, and the slower the economy gets. Judging by the statements here, the lack of confidence is at a very high level among jellies.

How you build confidence is pretty tricky. It’s like rebuilding trust in a relationship where someone cheated. It takes a long time. People aren’t ready to trust the economy yet, and the process of rebuilding might take a long time. I’m going to say six years. Just a stab in the dark.

A recent Wall Street Journal survey of 54 economists predicts the economy will add around 2.2 million jobs over the next 12 months – that’s down from last month’s forecast of 2.5 million jobs. This is the first time the forecast has been lowered since October.

Unemployment is currently 9.1%. The weak employment forecast would only slightly decrease unemployment. On average, the economists estimated unemployment at 8.2% by June 2012.

A general “slump” maybe the new feeling characterized by the patterning of paltry growth and relative stagnation. In a broader sense of things, the world and technology are rapidly providing an even footing for everyone, especially untapped/undeveloped emerging nations. This progressive evening of world markets, means first world nations still inflated with unreal wealth assets have a while to get back in the hot seat.

5–8 years.
The banks have foreclosed on a lot of homes, which caused home values to fall (simple supply and demand).
Businesses will have to begin rehiring, allowing people to get jobs and afford houses, relieving the excess supply of homes owned by banks, and finally causing owned homes to begin to raise in value.

I’m hoping never, with a number of small, locally resilient economies to replace it.

Yeah, one last good squeeze, although mansions still popping up in outer dc area… amazing.

I think a lot of businesses are holding onto their cash until after the next presidential ellection. They hate Obama so much that they don’t want things to get better on his watch. If Obama wins reelection they will probably start spending again. I can’t see them holding out for 4 more years.

@Judi US Corporations are sitting on about $2 trillion in cash reserves right now, but I don’t think many are doing it out of any political motivation. They are not going to invests in hiring, buying raw materials and providing a glut of new inventory or services when they know the middle class is tapped out and can’t or won’t buy what they produce. They would just fill warehouses with unsaleable goods, and soon find themselves in financial trouble. They won’t part with the cash till the middle-class malaise eases. It makes no difference who is president, except that one party actually cares about the middle class and poor, and the other is solely interested in the needs of the corporate jet set and millionaire donors.

I’m trying to sell my house (in UK) and there is no-one looking. In the 2 months on the market, we have had 5 viewings. The housing market is being squeezed here in the UK at the lower end because buyers need 25 to 35 % deposit. First time buyers don’t have that kind of savings – throughout the boom years we have not been encouraged to save but to spend. Once the banks start lending to buyers with smaller deposits things will change quickly as there are many people waiting to move, stuck in rented accomodation. This may be happening already but is slow

@wundayatta – There’s more than confidence that’s lacking. It’s a crisis of demand. If people had money to buy goods, businesses would be able to pick up the supply and hire more, which would create more demand in a virtuous circle. But with no one having much money to spend, it’s stalled.

Why don’t they have much money? They have no job (or they have a low-paying job), they have no equity, they don’t have any savings any more. That’s why the economy needs a large infusion of cash. The housing crash and related derivatives market crash made a lot of value go “poof!” which is why we’re needing government life support (TARP, stimulus, quantitative easing) to not go into a deflationary spiral. There really is much less “money” out there than there used to be. If we could get cash flowing again, from consumer to business to paycheck to consumer again, that would expand the tax base as well. And when things get rolling, we need to end the Bush era tax cuts and pay down what we borrowed.

However, what I hear from the right-wing is that spending to get the economy rolling again would not help, that somehow we need to take the bitter pill, and endure the very, very slow rise of the economy without any jump-start. That’s what I mean by collecting pop cans. Let me put it this way: if you’re out of work, and you borrow money to get an interview/work suit of clothes, some razors to shave, and keep up with the showering, you will get a job much faster (and begin to pay down that debt that you took on to buy the suit). However, if you tough it out and don’t borrow, and just stick to collecting pop cans to buy food (and can’t, therefore, afford much of anything like a suit), you will probably not be hired for a long time, if ever.

If the government “steps out” and lets the private sector “create jobs,” there won’t be many jobs created since no one buys anything. And if every time someone screams “inflation!” they hit the economy on the head with a brick to stop it, there won’t be a recovery for a very, very long time. That’s what Japan is doing, and it’s why we have a generation of Japanese people under age 40 who’ve not worked as anything other than temp workers.

In short: until we somehow replace all the “money” that was lost during the crashes, we won’t recover. Some people want to do this quickly, some people want to do it slowly.

Until they prosecute the scammers and financial powerhouses who continue to operate with a one-track, profit is the only thing mantra, probably never. Globalization has also been an abject failure as too many economists are in the bag of one lobby group or another, pushing their trade agendas with wildly different motives. There has to be a fundamental rethink of distribution and cooperation amongst countries to get off the oil bandwagon, retooling to think less like financiers, more like scientists and entrepreneurs. Too much brainpower is in creating financial tools than real tools. When a trader is making 10 times more than a neurosurgeon, 200 times more than a teacher, and 100 times more than an engineer, something is wonky in, your case, Wisconsin. Canada (my home) has been lucky, really just due to its resources, massive energy reserves, and a lot of luck.

@dannyc Don’t hold your breath for that to happen. Republicans are in a frenzy to repeal what little regulation the Obama administration was able to enact, and gut all regulatory agencies so we can do it all over again. It makes soooooo much money for the billionaires and corporate jet setters that fund the GOP, and it makes for perfect corny capitalism.

@ETpro Flunk on spelling 101. But I give myself an A for comical typos. Corny Capitalism above should have been Crony Capitalism. Hope the meaning was at least clar via the link.

My business is booming right now, but I’m in the apartment business. Since it’s so much harder to buy a house, people are staying in their apartments longer.

With three million households no longer in the houses they bought a few years ago, there’s gotta be more competition for rental units. Rising rent prices, not energy or food, looks to be where inflation makes significant changes in the CPI. After all, food is only 13.742% of the index, and energy 13.079%, while rent is 31.955%.

US Housing Crisis Is Now Worse Than Great Depression

I am not sure that the economy in the US can recover. We are still pouring trillions into the 3 wars we are waging – this is money that is not being spent to alleviate any of the problems facing our country. The problems with the economy are not limited to the US. It is a worldwide situation & our economic survival depends upon how well other countries deal with the same sort of problems that we are facing. If they start defaulting on their debts, it will have a domino effect & could well bring down the entire world’s economy. If this happens, no currency will have any value, & if currency has no value, no one will be able to afford anything – food, shelter, fuel, etc. Unfortunately, this whole cycle started under Ronald Reagan (one of the most duplicitous presidents we have had the misfortune to have in office) & each succeeding Republican president has only made the problem worse. It was during the Reagan years that corporations began to send our jobs to other countries & the “military industrial complex” began to gain the power they now wield with the able assistance of the Pentagon. They, along with the tender mercies of the Federal Reserve, have the American economy in a strangle hold & the distance between those who have money (& those who do not) is growing greater all of the time.

@Linda_Owl You are so right about Reagan. He headed the economy for the cliff it finally went over in 2007. Two Savings and Loan bailouts taught the GOP nothing. THe Great Recession of 2007 didn’t either. Every one of the debaters on stage in New Hampshire’s GOP debate wants to recind even the lackluster regulations Obama placed on Wall Street and let the Banksters extract another 3 or 4 trillion dollars from the economy and the middle class.

But all is not lost. Our debt as a percent of GDP was deeper in 1945 after paying to fight WWII and the Great Depression,, another fiasco largely brought on by the GOP love of Casino Capitalism. We paid that debt down and got the country back on track, really building the middle class in the process. We just have to wake enough Americans up to the doom facing them if we do not reverse the current course. But maybe letting the GOP have their way and do it all again is what it will take. The country slept through the buildup to the Great Depression and it wasn’t too long before they wee back asleep and willing to buy a pack of propaganda about how liberalism caused that failure.