Economic relapse threatens lasting damage

The Great Recession hit a nation that was flying high, but the current slowdown is striking a nation already on its economic knees.

By Don Lee,
Los Angeles Times
August 26, 2011

Reporting from Washington

Even if the U.S. economy avoids sliding back into recession, the continuing weakness is beginning to inflict long-term damage on many families and businesses that will make a full-blown recovery much harder to achieve.

The devastating recession that started four years ago hit a nation flying high on a housing boom and helium-inflated clouds of consumer spending. But the current slowdown is striking a nation already on its economic knees.

"That's the danger right now: You've got an economy that didn't recover," said Ethan Harris, Bank of America's chief economist for North America.

"We've had some healing," he said, noting that banks are in better financial shape, as are some households. "But the rehabilitation hasn't been completed," and a relapse would be like "hitting an already sick patient."

(More here.)