These days we have many talking heads talking about an end to the recession in this calendar year. The definitional of an end to the recession is when the economy is no longer contracting - GDP is no longer failing. In light of that definition, the recession may very well be over this year. The GDP isn't going to contract that much more while the government spends money like a drunk idiot. But the most important phenomenon Americans should be looking for is a recovery. They need to the economy to grow again, create jobs, and ultimately create prosperity.
A similar but more benign phenomenon happened in 2002-2003. During that period, the American economy had an jobless recovery. It was only natural because the Fed had papered over the recession. No one took the pain of the burst of the tech bubble only for the money to flow into a new housing bubble. During 2002-2003, the economy wasn't in a recession, but the average American didn't see much benefit - unless they were part of the housing bubble - in which case they leverage themselves to the hilt by extracting equity out of their homes.
Likewise this time, for the average American, the end to the recession means nothing. The end of the recession is merely an academic exercise of number crunching done by the tax-payer funded accountants or maybe even free market accountants. But this phenomenon is not going to be forthcoming anytime soon. In fact, based on government activity, it is going to be pushed out further and further. That is what TARP has been doing. That is what the bailouts have been doing. That is what the stimulus will do. Because while these acts of government can bring an end to the recession, it will also forestall any meaningful recovery.
Unfortunately what we have to recognize that the government is being advised a bunch of quack economists that would have the recession fester beyond the recession. They advise the government to give the American economy a shot of painkillers an to do nothing about the underlying rot and disease. In fact, the government is advised to force more of the same activity that brought about the original disease. Except now the disease has progressed to a critical stage, and the entire economy by virtue of government actions must bear the weight of zombie banking institutions and the gangrene of the Big 3 in Detriot.
And in this situation, while the American economy might no longer be techinically in recession, it will be in a state of stagnation and perhaps suffer from inflation indefinitely as dead industries spread their plague to the healthier parts of the economy. There will be no recovery.