Dick,
It was long before 2007 when many saw this coming. It started for me in 2002 when I was certain FNM was doomed and probably the best short out there. Of course that was before it REALLY got crazy and housing market doubled in some places.
If people would just trade price action and not "news", none of this crap would surprise them; but that's not how the world works.
Seriously, at this point, I don't think we as a country get out of this mess without experiencing serious and major pain. One of the primary reasons we ended up with the economic top in 2007 was that we as a world didn't want to experience economic pain. This is NOT a USA only problem. Look at Greece, Ireland and Portugal right now for example -- if the ECB hadn't stepped in last week to buy their sovereign debt, they would be busted, bankrupt. They may still be since as of right now, the ECB is the only buyer in those markets. How did they get to that point? Just like the US and many of our states, they spent and spent and spent, ever increasing their sovereign spending, selling more and more debt, hoping to never have to pay the piper. As soon as there was any pullback in ever increasing world-wide credit and tax base growth, the tide went out, and they were seen swimming naked.
The insanity was/is world-wide. That is the thing imo that Americans, "in general" have little concept and understanding. They listen to the mass media sound bites of one party spouting their talking points about the other party, many actually believe a lot of that crap, and then cement their beliefs by such drivel. We as a county have a huge majority of totally, economically "challenged" people that can't understand basic finance much less try to figure out what the hell is an MBS and why their Fed owns over $1.5T of the things. We actually believe we are the center of the universe and whatever the other party is in charge we didn't vote for is the evil doer, but "my party" is best. Eventually, this too will change after the pain threshold gets high enough.
Our "Federal Reserve" along with other world's central banks (developed countries) got the fine tuning down pat for almost 3 decades. They actually think they can control the economic outcome. People believe them still even after their repeated and continual disastrous monetary policy, especially during the 2001 to 2004 timeframe where they stocked and poured gasoline on a credit bubble bigger than anything in the history of the world.
That credit bubble has to deflate. Greece sold the landing rights to Athens airport back in 2002, and used the payoff to meet then current spending. I saw that at the time as one scary indicator of where things were at. It is just one of thousand of examples of the idiocy, world-wide, during that massive credit bubble peak.
Right now our gov't, especially the Fed, is pumping billions of dollars (Fed is monetizing debt, printing money) into that credit bubble deflation. I hope I'm wrong about the end point since they have no exit strategy. Short rates have been essentially 0% for two years now with no end in sight. The Fed now has over $3T in crap it has bought, and it has just recently passed China as the number one holder of US Treasury debt. Our own Federal Reserve holds the most of our own debt, and they're buying more and more like they've done essentially every day the past 3+ weeks with more POMO to come; see:
http://www.newyorkfed.org/markets/tot_operation_schedule.html
It doesn't appear the structural problems are going to be solved until we as a country are in trouble (i.e. much more "trouble" than we are in the past couple of years). The EU has a number of countries trying to solve their structural problems actually, so in a sense, some of them are trying to do the right thing (even if the Euro fails along the way, or member countries have to drop out -- that part is almost a guarantee).
We're not solving any significant structural problem, and we won't. It's always easier to kick the can down the road. Nobody will accept the truth. Anybody who actually tries to get at the base of our structural problems and do what is necessary will be immediately castigated and voted out or impeached. See how much of an optimist I am?
Instead we as a country are trying as hard as possible to reinflate that bubble. The "stimulus" was a total waste of our country's future funds. Since it didn't work out at all like it was "supposed' to, the excuse is of course made in hindsight with fantasies about what would have happened without it. The point is to look at what could have happened with a proper program as opposed to a pork-filled handout to supporters one.
Stuff I was screaming should have been done two years ago -- like payroll tax holiday -- is only now being considered. This perfectly highlights what I mean about how nothing will be "fixed" until we are experiencing a large level of pain. I hope I'm wrong. I pray everything about that view is dead wrong.
One of the things I literally wake up at night worrying about is how the average maturity of our Treasury debt is 6-7 years. This should scare the ever-living-crap out of each and every citizen. It is a perfect doomsday fuse that is lit. We're going to be really lucky to be able to put that thing out imo.
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, what do you see as what "should" have been done starting in 2007 or so when the mess became apparent? 
Or better yet from now on now that repubs and conservative dems (i.e. "capitalists") are controlling congress for a couple years at least?
or retire in a few years and enjoy life until I go broke. 
