Where is the United States Government? What are they doing? President Obama has done a terrible job in mobilizing the government to prevent further economic catastrophe. His stimulus plan paid off those who got him elected and is doing little in creating jobs. The labor force is hurting, with unemployment + underemployment to be about 20% of the overall work force. Several European countries have painted bleak economic pictures.

The Republican Party apparently believes that they will win seats in 2010 if they oppose every little proposal and are banking on a bad economy to help their party’s chances. This further complicates the government’s ability to tackle the problem.

- Jobs are continuing to be lost to overseas countries as our trade liberalization policies have come too fast, as well as the value of the dollar being simply too high.

-India and China will continue to grow and countries like South Korea and Singapore will continue to reap the rewards of being heavily invested in those markets. Countries that are heavily invested in the U.S., such as the  United Kingdom, Germany, and Japan will continue to face tough times.

Growth in the U.S. economy will remain incredibly slow as high unemployment weighs on domestic spending.

They are saying that the recession is over. But it may be too early to tell. After the dramatic fall of the stock market in 2008 it is much easier for some firms to post gain in sales. The great anxiety of the great recession is almost over.

Economists will point to emerging markets and point to their rapid growth and complete recovery after the recession. Even Japan has posted some gains.  You might be jobless and at a library reading this and wondering, what about US? China, India, Brazil, S. Korea and other countries have very little debt and little risk in their financial systems. In the 1990s and early 2000′s the U.S. financial system was guaranteeing all kinda of risky investments and making a lot of money, but the system easily collapsed during a slight downturn which in turn, caused it to get much more servere.

Mature economies are debt-laden and emerging markets aren’t. They are growing fast and can take the risks to invest in their economy to boost growth (Sure, some economists in Asia are saying this is creating bubbles in emerging markets which may burst and lead to recession down the road, but thats another story).  The US financial system is clogged with so much risky, bad debt that is guaranteed by the US treasury, further complicating matters. If the system starts rapidly growing like it did in the 1990s, companies will reap profit. If not, the treasury will have even more debt and people will have less in their life savings.

Tax revenues are still in decline, so job growth from the public sector is hardly any at all. State governments are not replacing retirees and property value decreases has slashed the amount local governments can collect–causing significant hiring freezes across the country. The stimulus money is helping, but not at a pace fast enough to offset the lower revenue from taxes.

There is hope. After the value of the dollar begins to drop due to the strength of high growth economies like China, India, and Latin America, exports should rise. Furthermore, after financial firms around the glob stop hording US dollars to secure their debt that should help the dollar decrease in value. In the meantime, investment firms that hold many overseas assets like Goldman Sachs should keep posting record profits.

Economists predict the unemployment levels in the U.S. to stabilize at around 9.6-9.8% nationally in 2010. The levels of job losses has declined but the losses are continuing–and more people are dropping out of the work force (giving up finding a job) which makes the number look better than it actually is. The drop in sales tax revenue is considered to have bottomed out and stabilized.  Economic growth will be slow due to the monstrous amounts of debt (Credit card companies aren’t helping by raising rates ten fold to beat the new credit protection law that will go into affect soon!). So expect the economy to grow slowly in 2010 with positive growth in GDP and by late 2010, actual job growth should occur.