RE: "Why should ECRI’s recession call be heeded?"
Well, by heeding it, that is surest way to make a recession happen!
RE: "It’s a vicious cycle..."
A little hyperbole, here. It is definitely "a statistical event." How severe or "vicious" depends on factors that are not addressed. Normally, a recession corrects excesses in the boom part of the cycle. The more excesses to correct, the longer and deeper, "vicious", the recession. It should be obvious to most that our economy has generated little excess in our "boom" segment. We had a financial recession and the rebound has been hampered by the financial drag of a broken real estate system. Most of the rebound was driven by fiscal stimulus. Politicians with little understanding of economics, the Tea Party, have prevented additional fiscal stimulus and, in fact, have pushed for a contraction of the fiscal stimulus. A recession, if it occurs, will be the result of political decisions, will be statistical, mild, and a continuation of the current economic malaise. Unemployment may worsen, but not by much. Ditto for the deficit. |
