(1)   Financial institutions still have too many toxic assets, including mortgages on homes that will never be paid off.

(2)   Banks are still sitting on millions of homes in foreclosure that are being held off market, creating a hangover of dead housing that will depress home prices for years.

(3)   Real Wages are in long-term stagnation in the US, Japan and most rich countries

(4)   China is slowing down, due to rising wages and raw material prices, declining export markets in rich countries, and the demographic consequences of the 1-child policy shrinking its labor force in the next 30 years.

(5)   Populations in all rich countries are aging very rapidly, diverting consumption to health care and depressing household formation.

(6)   European countries have pension and other state obligations that are unsustainable.

(7)   The US has rising medical costs and state obligations for health care that are
unsustainable.

(8)   US local and state governments have pension and medical costs that are
unsustainable.

(9)   Political opinion has tipped away from stimulus in favor of austerity in Europe and the US, so there will be no major goverment programs to create a stimulus — nor could there be for long because government debt/growth ratios cannot be pushed much further.

(10)   Investments for future growth are not being made – so whether it is education, transport, energy infrastructure, or basic research, we are continuing to live off investments made half a century ago rather that renewing our foundations for growth.

None of these conditions means that we are going to fall down further, or that business will not continue to make steady, modest profits, that exceptionally talented performers will not still get outsized rewards, or that 75-85% of the population will not continue to work.  But it does mean that unemployment will stay high (7-9%) for years, maybe another decade; that real estate and other assets will stagnate; and that the rapid GDP spring-back and growth on which governments and companies are basing funding for their future liabilities – pension and  health care obligations – will not materialize. We are thus going to have major adjustments that involve raising taxes and reducing government spending, which will further act as a brake on growth.

Sometime in the next 20-30 years, we will see a cluster of technical breakthroughs, similar to those of the car/electric train/plane, the chemical engineering of plastics and artificial fertilizers, or the digitizing of information and high-speed information processing, that unleash a massive global wave of growth.  These will likely involve leaps in energy generation and transmission (cheap solar, fusion, DC transmission?); steps that greatly reduce the cost of health care (genotype-designed diets and precisely timed and delivered gene-targeted therapies, cheap grown or manufactured body parts); and improvements in state-building and administration that deliver a major reduction in the money spent globally on armaments and conflicts.  Any or all of these will free up and generate new purchasing power and generate a new wave of strong economic growth.  But none of this is going to happen in the short
term.

So for the next ten years, growth is dead.   Get used to it.