I’ve been holding on economic predictions for the past month till the elections were complete. Now that they’re in, I’ve some general expectations. Today’s watchword is pessimism.
The most positive forecast I can determine gives us real GDP growth of a bit under 3%, with unemployment getting under 9% by the end of the year. Getting there requires:
a) Bush Tax Cuts are allowed to expire;
b) Unemployment Insurance gets extended at least six more months;
c) the debt limit is increased with little to no delay.
If the incoming house Republicans stand by their rhetoric, none of those will happen. If they stand by their rhetoric we will see a second economic plunge into at least recession, and potentially into major depression compounded by sovereign default.
Gods, I hope I’m wrong.