The Great Recession was caused by manifest structural problems in the economy: a wide trade gap with China and on oil, banks that had forgotten how to earn profits through sound lending, failed financial regulations, and skyrocketing health care costs.

President Obama's policies have mostly exacerbated those problems. That's why the recovery is so weak, and a second recession now could put the economy down for good.

Too many young adults who are unemployed or in poorly paying jobs are living with aging parents. Many older Americans are running down IRAs before reaching retirement age, hoping for better days.

The safety nets provided by parents and savings will soon tear. If the economy goes down again, the negative feedback cycle of fewer jobs, less spending, more layoffs, and so forth will be much more severe than in 2008.

The hallmark of a depression is a recession that does not sow seeds of recovery by creating pent-up demand for business and consumer durable goods. Truck and car replacements played a mighty roll in the most recent recovery.

With many Americans slipping from the middle class, businesses may simply downsize for a permanently smaller U.S. economy, and families will own fewer vehicles, appliances and electronic toys. Unemployment in the range of 15% easily could become the new normal.

President Obama should risk upsetting his base and offer Republicans in Congress a reasonable deal now.

Republicans should admit what they already know -- Mitt Romney is no messiah -- and take the risk of compromising now.

American can't afford for their elected officials to dither any longer.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Professor Peter Morici, of the Robert H. Smith School of Business at the University of Maryland, is a recognized expert on economic policy and international economics. Prior to joining the university, he served as director of the Office of Economics at the U.S. International Trade Commission. He is the author of 18 books and monographs and has published widely in leading public policy and business journals, including the Harvard Business Review and Foreign Policy. Morici has lectured and offered executive programs at more than 100 institutions, including Columbia University, the Harvard Business School and Oxford University. His views are frequently featured on CNN, CBS, BBC, FOX, ABC, CNBC, NPR, NPB and national broadcast networks around the world.

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