Economist John Hussman says consumers won't start spending again until debt and mortgage restructuring has been achieved.

“Debt restructuring is the best remaining option to treat a spreading cancer,” Hussman writes in a note to investors. “Other choices are fatal."

“Consumers are reluctant to spend because they continue to be overburdened by debt, with a significant proportion of mortgages underwater, fiscal policy that leans toward austerity, and monetary policy that distorts financial markets in a way that encourages further misallocation of capital while at the same time starving savers of any interest earnings at all.”

Consumers are reluctant to spend because corporations are reluctant to hire and corporations are reluctant to hire because consumers are reluctant to spend, Hussman notes.

“Unfortunately, simply offering consumers some tax relief, or trying to create hiring incentives in a vacuum, will not change this equilibrium because it does not address the underlying problem,” Hussman says.

"Keep in mind that the global equity markets can lose $4 trillion to $8 trillion of market value during a normal bear market.”

Strategies such as property appreciation rights can coordinate restructuring without public subsidies, but large-scale restructuring will not be painless, and may result in market turbulence, Hussman notes.

The Voice of America reports that Federal Reserve Chairman Ben Bernanke said that spending by U.S. households expanded moderately in 2010, but diminished this year in the face of higher gasoline prices, persistently high unemployment and large personal debts.