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 under way.
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 Americans may be slightly worse off in four years than they are now.
The damage already done by plunging house and stock prices, the failure of a global economy as an independent source of growth and hidden weaknesses in America’s past performance have crippled nearly every actor in the nation’s economic drama.
The result: An economy that once averaged 3 percent or better in annual growth would be lucky to grow 2 percent a year during the presidential term of Barack Obama, who is to be inaugurated Tuesday.
“That is going to feel like stagnation” to most people, said John Lonski, chief economist at Moody’s Investors Service.
“We’re in a post-bubble global recession, and post-bubble recessions are lethal for growth,” Stephen Roach, chairman of Morgan Stanley Asia, said from Beijing. “It will be a long time before the world experiences anything more than anemic recovery.”
Obama misses no chance to temper hopes for a quick and complete comeback. A recently released study by Christina Romer, his nominee to chair the Council of Economic Advisers, and Vice President-elect Joe Biden’s chief economist, Jared Bernstein, concluded that, even with an $825 billion stimulus package, the unemployment rate at the end of Obama’s term would be between one-half and one full percentage point above where it was before the start of the recession. That would mean as many as 1.5 million extra jobless workers.
What most worries analysts is not a cataclysm such as the Great Depression but the sort of economic morass into which Japan fell after its stock and real-estate markets burst in the late 1980s and early ’90s.
Daily life for most Japanese citizens wasn’t terrible. There were few company shutdowns or mass layoffs. The problem was that the country simply didn’t grow — and that, economists worry, is what could happen in the U.S. and around the world.
