Debt could lead to so-called “Lost Decade”

The financial problems suffered by many consumers over the last 10 years could lead to significant problems going forward, giving America its own version of Japan's infamous "Lost Decade."

Industry experts believe the recessions suffered in the wakes of the terrorist attacks on September 11, 2001, and the subprime mortgage meltdowns could slow economic growth for some time to come, according to a report from CNN Money. These problems could last another six or seven years before more significant improvements in consumer spending are observed.

"I think we're in for a lot of disappointment," Carmen Reinhart of the Peterson Institute for International Economics, and an expert on financial crises, told the news agency. "If historic norms hold, deleveraging isn't pretty, and it is not a smooth process. We're already four years into this. I don't think the next six years look great."

It would be similar in many ways to the lengthy financial problems experienced in Japan after its real estate market nearly went belly up in the 1990s, the report said.

Many problems in the U.S. may have been driven by vast amounts of private sector debt, leading to many consumers looking for ways to to reduce debt and find an alternative to bankruptcy.