It’s true – the recession will be over in a few months. A few economists actually believe that it is already over based upon a number of factors, including improving home, retail and auto sales. I’m not one of them, but perhaps I pay too much attention to the labor market, which remains awfully weak.
Though economists differ regarding when the recession will end, there appears to be near unanimous agreement that the recovery will be a sluggish one. I am in this camp. There are a number of reasons for this – let me list a few:
· Household balance sheets are still overleveraged and the debt service ratio remains high;
· Commercial real estate’s downturn has just begun and many key sub-segments will require years to recover;
· Unemployment will continue to rise during the initial months of economic recovery, probably rising to 10.5%-11% by sometime next year;
· Housing prices continue to decline, due in large measure to rising delinquencies, defaults and foreclosures;
· Corporate earnings, though improving and beating expectations presently, will not expand briskly in 2010 in many key industries, including those that serve consumers directly – I believe that consumer behavior has been permanently altered and that we will remain over-retailed from a supply perspective for quite some time;
· The global economy, with the notable exception of China, remains weak, which will hamper export growth (though exports were up in May, a pleasant surprise);
· Fears of shifting regulations, future tax increases and interest rate hikes will dampen business enthusiasm in 2010;
· Immigration will not drive the economy forward as forcefully as it has in the past;
· Income growth will remain weak, particularly since many of the manufacturing and distribution jobs that have been lost during this cycle will not be regained; and
· State and local governments remain under significant fiscal duress – California and New York State come to mind, though as everyone around here knows, the State of Maryland has its own set of issues.
-AB
Folks can’t carry around money in their pocket. They’ve got to go to an ATM machine, and they’ve got to pay a few dollars to get their own dollars out of the machine. Who ever thought you’d pay cash to get cash? That’s where we’ve gotten to.
I’ve been involved in taxes for longer then I care to admit, both on the personal side (all my working life!!) and from a legal standpoint since passing the bar and pursuing tax law. I’ve provided a lot of advice and righted a lot of wrongs, and I must say that what you’ve posted makes perfect sense. Please keep up the good work - the more people know the better they’ll be equipped to deal with the tax man, and that’s what it’s all about.
They always say time changes things, but you actually have to change them yourself.
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Note Mr.Paulson has stated that the Obama policies are required to facilitate financial growth.Governor of Minn.a republican admits to the republicans failures as leaders.Thats just to mention a few items you could be researching.The truth is beginng to emerge and cannot be stopped.Continue to be blind to progressive measures will come to facilitate your demise.
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