No question that there are still jobs out there, but they are harder to come by and there are less of them. There are also risks to the recovery:
1. Price of oil - over $65 / barrel, gas at $2.80 / gallon here in Seattle
2. Interest/mortgage rates - excessive borrowing by the government is driving up the cost of money - not a good thing for a recovery
3. Higher taxes - related to #2, we cannot continue to borrow $2 trillion per year and expect a healthy economy in the near and especially long term - where are the $$ coming from?
4. Health care “reform” - will create massive uncertainty in the employment market and will cost $1 trillion over 10 years - where are the $$ coming from?
5. State & local government spending - some heavily dependent on property taxes with falling property values. Many states have negative budgets now, and they cannot borrow. They are for the most part reluctant to cut expenditures so they will need to raise taxes.
6. Geopolitical events - N Korea, Iran, Pakistan.
So those that predict a “V” recovery are dreaming. We are looking at either an “L” recovery where we set a new baseline or a double dip when the pain of these issues is realized.
Hope I am wrong.
schu
This article failed to mention the next two waves of foreclosures, and the ripple effect through the real estate market and the economy. Also, a ton of commercial real estate is in trouble and that will have a significant effect.
We’ll see, but it seems to me that the tax burden both businesses and individuals face going forward will squash any “v” shaped recover. I could easily see inflation swamping any gains in the markets.
Hope I am wrong.
I agree.....
.....but you forgot a few things that will make this economic train wreck worse before it ever gets better.
First is the tax-tax-tax party going on in Washington. Even the threat of taxes will keep the economy down at least until a possible House/Senate RAT killing in 2010.
Second is the AGW anti-energy thing that is helping your #1 go upward. Energy is the blood of an economy. Obama and the RATS are trying to give the USA blood poisoning.
Third is the UN and International Law regarding personal freedoms we take for granted. Obama and the RATS love the UN and their desire to limit our freedoms in the name of the children. It could be illegal to Homeschool or spank your child. And that's not the worst of it.
Finally, we have a President that hates what the USA was and is. He is attempting to tear down the fabric of freedom and replace it with some sort of socialist dream his mother taught him. This bodes poorly for us. As CIC, he could dismantle our military before we can stop him. We will be ripe for attack and how could an economy thrive with that kind of threat?