Economic forecast update

I see that Stiglitz is predicting a second downward surge. Krugman is predicting doldrums unless we make a new stimulus.

Allow me to forecast again. 2.5% (give or take) for 4th quarter 2009. Passage of Health Care bill before Christmas (probably near Thanksgiving) will act as a stimulus. Passage of Jobs Recovery Act or whatever Son of Stimulus: The Jobs is called will also act as a stimulus. The tax relief and monetary supplement elements of the 2009 stimulus act that are scheduled to take effect in 2010 will act as a stimulus. None of the three are large enough in themselves but in concert will (In My Opinion) kick 2010 over 3% growth in GDP.

Incidentally, SoS:TJ plus the employment effects of 3+% GDP growth will create additional jobs. You will not see the rate decline for up to six months as ‘exhausted’ seekers (those who’ve given up) return to the seeking, replacing the ones who’ve found work and so keeping the rate high. But the jobs will be created, and come summer 2010 you’ll start seeing the rate decline.

That is still my forecast, barring a catastrophic event.

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