U.S. economy may sputter for years

Unemployment could be worse than now by the time President-elect Barack Obama's first term ends.

By Peter G. Gosselin
LA Times
January 19, 2009

Reporting from Washington — Transfixed by the daily spectacle of dismal economic news and wild Wall Street swings, few Americans have looked up to see what a wide array of economists say lies beyond the immediate crisis.

And with good reason: The picture isn't pretty.

The sleek racing machine that was the U.S. economy is unlikely to return any time soon despite the huge repair efforts now underway. Instead, it probably will continue to sputter and threaten to stall for years to come.

The prospects are so gloomy, according to a recent study, that unemployment may be slightly higher by the time President-elect Barack Obama's first term ends.

The damage done by plunging house and stock prices, the failure of other major economies to be independent sources of growth and hidden weaknesses in America's past performance have crippled nearly every actor in the nation's economic drama.

None -- save perhaps the government -- retains the power to push the economy back to speeds it regularly achieved during much of the last generation, economists say.

(More here.)