Post Inaguaration: A Harsh Dose of Reality (Sydney Morning Herald, AUSTRALIA)

Americans already know a great deal about what this year will bring. Much of it will look like the latter half of last year.

So much momentum has built into the country's economic collapse that inertia alone will keep the job losses coming. Last month's figures, due to be released next week, are expected to show about 600,000 jobs shed in December alone, bringing total job losses for last year to more than 2 million.

Consumer spending has collapsed. The Christmas retail trade was the worst for decades and the slowing will continue indefinitely.

There will be a brief spate of national self-congratulations over Barack Obama's inauguration as the country's first African-American president, that milestone coming within a generation of the end of segregation. Pageantry appeals to Americans' sense of grandeur and their own unique mission. This time it will come with a sense of wonderment at how far the country has moved.

Harsh reality will return when Washington confronts the economic stimulus package, the actual dimensions of which are yet to be decided. In Australian currency it will be something more than $1000 billion of spending on infrastructure such as roads, bridges, hospitals and schools. Some argue that anything less than $US1 trillion ($1.5 trillion) will be insufficient to engineer recovery but that the new administration may take fright at the "t-word".

Mr Obama's advisers are talking of up to $US775 billion over two years for the package.

In any event, unemployment, which started last year at less than 5 per cent and is now 6.7 per cent, will continue towards double figures. The economic malaise is likely to persist until at least the last quarter of the year.

That is without factoring in a possible failure in the automotive industry.

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