Bill Gates Says Recovery Will Take Years

In a Monday morning interview on Good Morning America, Gates suggested that the smoldering effects of the worst recession in decades will continue to impact the economy for the foreseeable future. "When you have a financial crisis like that, it's years of digging out," Gates said in the interview.

Although there have been signs of economic improvement in recent months, as well as a collective sense of optimism in the IT industry that spending could rebound this year, there's little concrete evidence to indicate that this is anything more than wishful thinking. And if unemployment remains high, the dreaded 'S' word -- stagflation -- could begin to creep into discussions about the economy.

Gates said even when the economy does improve the government will have to institute systemic changes in order for any real rebound to take root. "The budget's very, very out of balance and even as the economy comes back, without changes in tax and entitlement policies, it won't get back into balance. And at some point, financial markets will look at that and it will cause problems," Gates told Good Morning America.

Gates' struck a similar chord last week in his annual letter from the Bill and Melinda Gates Foundation. "Although the acute financial crisis is over, the economy is still weak, and the world will spend a lot of years undoing the damage, which includes lingering unemployment and huge government deficits and debts at record levels," Gates wrote in the letter.

Of course, none of this is fundamentally different from what Gates and Microsoft CEO Steve Ballmer have been saying about the economy since it began tanking in September 2008. Ballmer has presided over several of the weakest quarters in Microsoft's history, and on several occasions has called the economic situation "the toughest Microsoft has ever faced."

Microsoft will report its fiscal second quarter earnings on Jan. 28, and investors are expecting some sort of bump in revenue from Windows 7, as well as a glimpse into a possible uptick in PC demand.

But as Gates said, any dose of good news these days, whether Microsoft-specific or on an industry-wide scale, must be weighed against the larger economic issues that are still hanging there like storm clouds.