Don't Expect the GDP to Increase Anytime Soon.

I found this article on yahoo and the title surprised me, "Expect just 2% GDP Growth Over Next Decade, Gary Shilling Says." Shilling went on the talk of the housing sector and unemployment outlook.

Full article available at:

http://finance.yahoo.com/tech-ticker/expect-just-2-gdp-growth-over-next-decade-gary-shilling-says-421149.html;_ylt=AmIYW0gpj7RhFdDtUnzufhW7YWsA;_ylu=X3oDMTE2ZGU2a2c3BHBvcwMxMQRzZWMDdG9wU3RvcmllcwRzbGsDZXhwZWN0anVzdDJn?tickers=dia,spy,xlf,man,xhb,len,hd&sec=topStories&pos=9&asset=&ccode=

The housing sector. Some regions, including NYC, have enjoyed a mild recovery reflecting Wall Street bonuses. But the national housing inventory overhang remains high. Shilling forecasts another 10% drop in prices and one-to-two more years before housing truly bottoms. Expect lenders to take over more properties as modifications fail, he adds.

Unemployment outlook. Think chronic. Shilling's forecast of 2% growth is below the 3.3% level needed to keep unemployment stable. On the ground level, it's taking laid off American workers longer to find new jobs and the number of jobs lost since December 2007, now estimated at 8.4 million, is about the twice the percentage drop in any previous post-World War II recession.

Obviously another 10% drop in prices is going to hurt the housing market for sellers. The sellers will have to take ridiculous losses on what they originally paid for the house or they will have to stay in the house until the market rebounds. Also with lenders seizing more properties, I feel as though numerous homes will fall into disrepair like the ones we saw in House of Cards.

Regarding the unemployment outlook, I feel as though it will start to gradually decrease in the months ahead. In response to Shilling saying that laid off workers are taking a longer time to find new jobs is obvious. With so many people looking for work, employers can pick the best of the best required for the job.

However, I disagree with the statement presented in the title. I feel as though the GDP will increase more than 2% within the next decade. With jobs coming back, consumption will increase as well as investments due to more spending money in the market. I don't expect government purchases to increase much considering the large debt the government currently has. I feel the same way with net exports because other countries can produce the same goods the U.S does but at a much cheaper cost and we can't compete with that.

How do you feel about Shillings' grim outlook on GDP for the upcoming decade? What are your thoughts regarding Shillings outlook on the housing market and unemployment?