We are Japan:
Aging population
Loss of manufacturing base
Severe debt
Lack of political will for change
Financial-Legal economic base
Some can argue effectively that we are worse off than Japan - we are fighting two wars, 40% of homeowner are underwater in their mortgages, real unemployment is close to 20% and on.
Aside from the fact that Japanese save more than - oops - that just changed too as Americans are now saving more than they have in the last 30 years.
The housing market won't be coming back for at least another 5-10 years. Where will jobs come from? Unless our government backs huge subsidies for residential and commercial green energy (solar, geothermal and wind), we will continue to fall behind the rest of the world in this area and lose an opportunity to create millions of new jobs in the tech and manufacturing verticals (by selling our better products overseas). Think about it, what is the next big economic boost? The internet was supposed to be that, but it really is a productivity tool in disguise, ultimately leading to a shift in jobs, not a creation tool.
If you want to see where our stock markets are going, simply look to the Nikkei. Anyone expecting a long bull market going forward will be disappointed. Dividends are a must. Having the time to find the diamonds in the rough in the key sectors is critical. But buy and hold at best will keep your portfolio neutral.
Your best bet? Pay down debt.
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