Here's the story from Blogging Stocks [I would have quoted Moody's more directly but the article is in a gated portion of the site]:
The rate at which jobs were cut slowed in August, but the gap to be filled will be with us for a while. With 14.9 million people looking for jobs according to Moody's Economy.com, the unemployment rate won't hit 5% -- considered "normal" -- until 2014. To put this in perspective, we still have one presidential election and two mid-term contests between now and a full employment recovery.
What does the Great Zandi think the consequences of this prediction are?
Policymakers should thus be quietly preparing another round of fiscal stimulus for early 2010. Effective additional stimulus might include more help to state and local governments, whose budget problems will probably be even worse next year; an expanded housing tax credit to address the foreclosure crisis; and a payroll tax holiday. Delaying increases in marginal personal tax rates, now legislated to occur at the start of 2011, would likely also make sense. Higher-income households may begin to rein in spending in 2010 as they prepare for the higher tax rates.
Interesting prescription: more (borrowed) stimulus spending, and keep the Bush tax cuts in place.
The difficulty here [and I am trying to be fair to a Keynesian economic model that I think is both dated and dangerous] is that at some point you hit a dynamic wherein the deficit/national debt becomes so high that the currency becomes worthless before the employment rebound allows the nation to begin paying it back.
That's the I'm-being-sensitive-and-taking-Zandi-at-face-value interpretation.
Here's my cynical political observer take: Zandi and the other Keynesians are beginning the process of insulating the Obama administration from the political fall-out of continued high unemployment throughout both election years of 2010 and 2012.