The Next Recession

It is unusual for a bull market to last much longer than ten years. Increasing instability would suggest that this one is nearing its end. This has some important implication for the coming decade.
 
Since the financial collapse and the Great Recession we’ve seen little action by the government or anyone to fix the problems that caused the collapse. In many ways these problems have gotten worse; the Too Big to Fail banks are larger than ever, the shadow banking sector has expanded, private equity firms have caused housing prices to rise while homeownership has fallen, major US corporations have taken on considerable debt to fund stock buybacks (arguably stock market manipulation) rather than invest in R&D. Meanwhile government debt has skyrocketed and the Fed has held interest rates low for a decade. This means the government has little fiscal or monetary tools to counteract the effects of a financial crisis and ensuring recession.
 
Many households are in such a precarious economic position with debt and mortgages that the next economic downturn will lead to mass foreclosures and inability to cover both debt and living expenses. Considering rather stagnant wages the last decade, rising household debt, and the loss of wealth in 2008, most Americans are in a worse position than they were in 2007 meaning another recession has the potential to be considerably worse. Debt is dragging down growth and it has the potential to strangle the economy when the next recession hits. 
 
I am not fear mongering here, I am trying to properly express the urgency of the situation so that appropriate action can be taken while we still have the opportunity. Remember folks, before the Great Depression we used to call the depression of 1873 the Great Depression. It is a mistake to think the course of history is perfectly linear, that the present is a good indicator of the future. History has a way of taking sudden, unexpected turns.
tl;dr: The economy is going to slow down, the government and households aren’t prepared for it.

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