"I see not much of an increase in GDP for the foreseeable future. Consumer debt levels are increasing slightly so we see spending with debt burden. Business debt is scarce and banks are demanding tough new conditions for new business debt. Government spending is, as usual, beneficial only to those who get the juicy, politically friendly contracts... and not much benefit to the economy as a whole. The Baby Boom is aging and downsizing so they aren't buying much except travel and that really doesn't help our domestic economy. The current generation is debt strapped into oblivion and their retirement plans are in tatters. The new graduates are, frankly, unemployable in this flat economy. The elderly will be killed off by Obamedics and medical services and revenues will be cut to the bone to fund Obama (non)Care. So... there ain't no spending capacity left. Everyone is tapped. I, in my Oracular capacity, see a very flat GDP over the next 10 or so years. Housing prices flattening at this funky low level. Jobs of any quality scarce (except for those on Wall Street who do foreign business), crappy Chinese made products falling apart and lowering the standard of living for all of us as our infrastructure deteriorates and intense social upheaval as the poor get violent and the middle class comes to realize that a decent quality of life is slipping from their grasp. In short, its the 1970s all over again..."
So sayeth the Oracle of Lexington.
"Consumer debt levels are increasing slightly"
The savings rate just went from 0% to 7%; Americans are saving ~$1 trillion a year they weren't this time last year. That covers a lot of debt service. While the savings rate soars, demand is lower of course, but it won't go on soaring at 8% of income per year rates indefinitely. In fact, it has probably already adjusted as much as it needs to (maybe a quarter more). As soon as the savings rate stops soaring, consumer demand is back.
"Business debt is scarce and banks are demanding tough new conditions"
But they do not require banks. Last fall in the panic the bond market closed, but it has reopened this year as the money market recovered (under Fed therapy). The corporate bond market has been in a full blown bull market since March, and $2 trillion in new issued have been floated.
"Government spending is, as usual, beneficial only to those who get the juicy, politically friendly contracts"
False, whoever gets the first receipt they have their own demands. The net new debt of the treasury must appear as net new assets to the corporate and household sectors, accounting identity. And they all spend it on whatever they normally consume. Sure, in the long run taxpayers pay what those gained, but it is short run stimulative whoever gets it.
"aging and downsizing so they aren't buying much"
Healthcare is booming of course. As a long demographic trend, the move south and west that got ahead of itself in the housing bubble is still in place, and lower rates and time will rationalize much of that capital allocation, that was mistimed and mispaced more than completely misdirected.
"The current generation is debt strapped into oblivion"
Nonsense, US household net worth is $50 trillion. All debts are owned and net foreign assets remain trivial, so they are pretty much all owned here. The asset line dropped $7 trillion with stocks and real estate, but that just puts it at mid "oughts" levels, and it is being added to at a $1 trillion a year clip now that the savings rate has recovered. The whole line that Americans weren't saving has been obliterated by the crisis. Those who were dissaving recklessly were cut off; the populace as a whole now saves again.
"new graduates are, frankly, unemployable"
Hardly, with productivity at record levels. The job market is a lagging indicator and will take a year to recover, but incomes have held up anyway. Net job growth will continue to come from the small business sector and from services, same as always.
"revenues will be cut to the bone to fund Obama"
Contradiction in terms. The government is in fact going to mandate $1 trillion more in spending in the health care industry, all of which will be earned by health care providers. This may not be the most efficient allocation of resources, but it is certainly a net new inflow to that industry and a huge one.
"Everyone is tapped."
There is a wealth effect that has reduced spending and increased the need for savings, that is certainly true. But net worth is over $50 trillion, savings are 7% of income, companies are profitable despite the epic dislocation in demand last year, financing is possible again. Everything the free economy actually needs in order to grow is present. Dumb tax increases from the government are an impediment, but the Fed is extremely accomodative.
"very flat GDP over the next 10 or so years."
I'll bet you a beer the average rate of real GDP growth over that long a period beats 2%, same as it always does.
"Jobs of any quality scarce (except for those on Wall Street who do foreign business)"
There are 2 million unfilled want ads as of this moment. Business week did a story about it. No, Wall Street is not the place people are hiring, that is a smear and beneath the rest of your discussion. It has in fact lost several hundred thousand people and the finance industry has lost several times that again. But health care is hiring, and tech is hiring, and services as always.
"its the 1970s all over again"
We are in a deflation not an inflation. It is not remotely the 70s all over again.