We had economist Gary Shilling on TechTicker this morning. He still thinks we're in for a crappy decade...

The theory behind most of what the Federal Reserve does to stimulate the economy is this: If we make money cheaper, people will borrow more of it--and then they'll start spending again.

That theory works in most recessions. When the economy begins to weaken, the Fed cuts interest rates. Banks, companies, and consumers see that it now costs less to borrow money to buy the things they want to buy. So they borrow money and buy them. And the economy strengthens again.

But we aren't in a normal weak economy, says economist Gary Shilling of A. Gary Shilling & Co. We're in a "deleveraging" economy. And that means that we will keep reducing our debts and borrowing, no matter how cheap money gets.

The key to understanding the difference between today's economic weakness and normal economic weakness, Gary says, is to look at the past 30 years.

Beginning in 1982, Americans spent their way to apparent prosperity. Savings rates plummeted, as consumers spent almost everything they earned. Home equity withdrawals soared, as consumers realized they could use their rapidly appreciating houses as personal ATM machines. And, across the economy, total debt surged to a previously unheard-of 375% of GDP.

But now all those forces have reversed. Savings rates are climbing again, as consumers realize they have almost nothing left to retire on. Home equity withdrawals have ceased, because house prices have stopped appreciating and started falling (Gary thinks they'll fall another 20%). And consumers are looking at ways to reduce their debts, not borrow more money.

These trends will continue for at least another decade, Gary Shilling thinks. He lays out this theory in his new book, "The Age Of Deleveraging."

The economy will grow in the next decade, Gary says, but it will grow much more slowly than it has grown in the past. Unemployment will remain high. Consumers will continue to be forced to embrace a new frugality. And no matter how cheap the Fed makes money, overall borrowing will continue to decrease.

In the process of this, stocks will do poorly. House prices will fall another 20%. Only Treasury bonds will do well.