Even with plans, economic recovery to take time

Even if numerous proposals in the works - such as the historic bailout sent to Congress yesterday - are enacted right away, experts interviewed for this story said long-term solutions may be difficult to implement and may not really do the trick, in large part because today's economic and financial turmoil is rooted in a widespread credit availability crisis and billions of dollars in home mortgage losses. Without credit - lending done between businesses and consumers and their banks and between the banks themselves - strong economic growth is harder to spur.
The credit crunch, combined with the extent of the troubles in the housing and mortgage market, makes these times unique, according to academic experts and economists.

Housing and credit problems could lead to tough times even after the downward spiral bottoms out, the experts said. Instead of a rebound that leads to extensive economic and job growth - as was seen after the recession of the 1990s - economists said, it's possible the economy could go through an extended period of stagnation, where no one is losing ground - but no one is gaining ground either.

Bernstein, an economist with the Economic Policy Institute, a left-leaning Washington, D.C., think tank. "It's not going to be easy."
Congressional staffers began meeting yesterday on the Bush proposal for a massive bailout - which would give the Treasury Department sweeping powers to buy and then sell up to $700 billion in mortgage debt, and could increase the national debt to as much as $11.3 trillion.
Even with all of the solutions discussed in the past week, and the Bush administration's plans unveiled yesterday, many experts think what the economy and financial systems need is simple - but yet incredibly discouraging and worrisome to investors, consumers and business owners alike: time.Making that more complicated, Malanga noted, is the host of unknowns that remain and the potential for unpredictable events that could make an uncertain environment worse.

Continued turmoil could mean that, even with potential solutions in place, a strong bounce-back may not ensue quickly.