With news this bad, what's next for America?

To some it signals the end of the American empire, to others it's just part of the vicious capitalist cycle. Either way, the litany of bad economic news in America has many pondering where it all goes from here.

Millions of US jobs have been lost and more layoffs are expected. Banks have reined in lending after a credit crisis and a housing collapse that has sent foreclosures surging.

On Wall Street, several investment banks have collapsed. The US stock market has lost more than 40 percent of its value. Behemoths like Citigroup have struggled to survive.

Tough times also threaten the once-mighty US auto industry, with General Motors and Chrysler LLC seeking billions in aid from Washington and warning of potential collapse if they do not get a bailout.

"We are seeing the beginning of the end of the American empire," said Howard Zinn, author of A People's History of the United States.

On the right, former International Monetary Fund chief economist Simon Johnson sums up the view this way: "Capitalism is not dead, there is no alternative to capitalism. "The myth of wonderful capitalism is dead but not capitalism, just the nice warm fuzziness."

Every week, there is more hard-to-believe news; A Wall Street trader arrested on charges of a €36.4 billion investor fraud, and the governor of Illinois accused of trying to sell the US Senate seat vacated by President-elect Barack Obama.

There is now so little respect for President George W. Bush that an Iraqi journalist threw his shoes at him on Sunday, a grievous insult in Iraqi culture. Mr Bush prepares to leave office next month with a presidential legacy battered by the grim economy and the unpopular war in Iraq.

Everyone agrees the situation in America, now officially in recession, is certainly bleak.

"Everyone wants to save and no one wants to spend. That makes it very hard to get growth," said Mr Johnson, likening the US economic predicament to having fallen into a bathtub and struggling to get traction to climb up the slippery wall.

Experts are uncertain how long the American economic malaise will linger. Some predict a year or two, others fear a slowdown of as long as a decade, reminiscent of Japan's lost decade of the 1990s.

"Things are bad," said Alan Ruskin, chief international strategist at RBS Greenwich Capital. "This is not a typical recession, but it is still not like the Great Depression."

While there has been much talk about the misery of the 1930s, economists say this slump will not be so dramatic.

Massachusetts Institute of Technology economist Johnson noted, "If you had gone to Tokyo (in the 1990s), you would have seen that it looked quite respectable and people looked reasonably happy, but there was no growth."

Likewise, he said Americans should brace for "low growth not fast enough to create meaningful jobs for people" for the next five to 10 years.

A poll released by Marist College Institute for Public Opinion on Monday showed 24 per cent of Americans thought it likely they would be laid off or see their working hours cut in the coming year.

Andre Myrtil, who owns a small technology outsourcing business in New York, sums up the business environment for many, saying he is getting less work and companies are being slower in paying him. "There's no work. My phone's not ringing."

"I'm not throwing in the towel yet," he said. "It can only get better, but time will tell."