Robert Samuelson, resident economist at the WaPO, analyses the economic crisis in today's column. There are three separate but interacting crises: the drastic fall in consumer spending, the financial crisis causing credit to dry up, and the trade crisis, with its huge imbalances. Progress in any one could help a little, but progress in all three is unlikely.
Translation: how in the hell do we get out of this mess?
My answer: we don't, in any recognizable way. The flattening of our bubble economy is going to continue, and it is going to be nasty. All the prosperity of the last three decades was based on borrowing, debt, and 'leverage'. In other words, it wasn't a true prosperity at all, but rather like those Americans who used their plastic to buy things, thinking they were rich, when they were just borrowing the money. Whoops. (Which reminds me, here comes the next bursting bubble, credit card debt.)
Fasten your seat belts, because it's going to be a bumpy ride.