Ah yes, the Reagan years. Remember getting that growth by tripling the national debt?

As has been mentioned, the losses seem to focus mainly on areas such as construction and manufacturing. While some may argue that these will be difficult to recover, I tend to think otherwise. Since these are cyclical sectors anyways, with the ability to quickly ramp up production when needed, they conceivably could recoup losses quickly.

However, this is assuming that there are no further shocks to the system. Also, the commercial property market will weigh on the economy for years, just as it did in the late 80′s and 90′s. In a way this is a good thing, because even before the crisis there was too much excess capacity, and there needed to be a forced halt to construction so as to decrease vacancy.

The final caveat, that could really throw a wrench into the recovery is the success of small businesses. With the collapse of CIT, and still frozen lending, one of the primary catalysts of innovation and growth will continue to struggle. Past recessions have usually been followed by the creation of new business. If the small business environment does not improve, it will certainly weigh heavily on any recovery.