Judging by the consensus of many economists, the next 10 years may not be any brighter than the last-the last 10 years begin with the "election" of Bush back in 2001 and his appalling tax cuts. I've spoken about them in several posts as they really are the worst fiscal policy of modern times.
Today CNBC featured a piece about David Faber who says that while he doesn't think we're gonna repeat 2008 we could be in for 10 more years of "very muted growth."
" I think for the next 10 years we'll have very muted growth in the Western world and standards of living for the average household will continue to decline."
Another words very much like the previous 10 years."I think we never really came out of the recession in many different sectors of the economy," Faber said. "If you look back to say 1999 to today, the U.S. as an economy, macroeconomically speaking, is of course much worse off than in 1999—courtesy of the Federal Reserve I may add."
Many economists currently have such a dour view. "Goldman Sachs has cut its forecast for growth to 1.5 percent for the year."
According to a recent AP survey of leading economists "Another recession isn't likely over the next 12 months. Neither is any meaningful improvement in the economy."
Of course this depends what you mean by "recession." While technically June 2009 was the technical end of the recession-a recession here is simply defined as 2 consecutive periods of negative GDP growth-if you are out of work, or underemployed or working for barely a living wage this is cold comfort for you.
There are some more bullish forecasts for the economy and I had profiled on last week.
According to Roger Lowenstein, "The economy isn't as bad as you think. But higher taxes are our best hope."
Certainly if the Bush tax cuts are ever allowed to expire-a major if-I would be a lot more bullish. And true Obama is now pushing a substantial jobs program.
Lowenstein's case bears repeating, " a little patience is in order. The economy is sluggish because consumers have been repaying their debts. That always takes time after a financial crisis. The good news is, the typical household’s debt service, as a percentage of income, is now nearing record lows. Mortgage debt is still falling, but credit-card borrowing is ticking up. Translation: spending should pick up soon. (And note: letting the tax cuts expire will not mean Hoover-style prudence; we would still be running big deficits.)"
God I hope Lowenstein is smarter than the consensus. We'll see. An additional factor that is sometimes suggested will bode well for our economic future is population growth. This in counter distinction to Europe. Indeed while Perry has engineered no "Texas Miracle" it is true that population growth as Texas has enjoyed is a positive factor for economic growth and jobs. So the anti-immigration fervor is another erroneous GOP idea.
Interestingly, for the market today at least, none of these concerns mattered. The Dow today soared 322 points and every sector rose. There were some better than expected earnings from the bank.
We shall see but one thing is clear if there is any hope we need to elect some liberal Democrats in 2012 including re-electing President Obama.