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Purveyor

(29,876 posts)
Wed May 11, 2016, 12:52 PM May 2016

Recession May Loom for Next U.S. President No Matter Who That Is

Talk about a poisoned chalice. No matter who is elected to the White House in November, the next president will probably face a recession.

The 83-month-old expansion is already the fourth-longest in more than 150 years and starting to show some signs of aging as corporate profits peak and wage pressures build. It also remains vulnerable to a shock because growth has been so feeble, averaging just about 2 percent since the last downturn ended in June 2009.

"If the next president is not going to have a recession, it will be a U.S. record," said Gad Levanon, chief economist for North America at the Conference Board in New York. "The longest expansion we ever had was 10 years," beginning in 1991.



The history of cyclical fluctuations suggests that the "odds are significantly better than 50-50 that we will have a recession within the next three years," according to former Treasury Secretary Lawrence Summers.

Michael Feroli, chief U.S. economist for JPMorgan Chase & Co. in New York, puts the probability of a downturn during that time frame at about two in three.

more...

http://www.bloomberg.com/politics/articles/2016-05-11/congrats-on-winning-the-white-house-here-s-your-recession

15 replies = new reply since forum marked as read
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Fresh_Start

(11,330 posts)
2. I've been thinking about that a lot
Wed May 11, 2016, 12:57 PM
May 2016

its not only our economy...but also that the global economy hasn't been contributing.

I wonder if the smartest thing to do would be to allow Trump to win...survive 4 miserable years...
but know that his voters will become even more disengaged or enraged with the GOP who once again let them down.

I hate the idea of any democrat being in office when we fall of the cliff again...

pnwmom

(108,925 posts)
13. The next President could be appointing 3 or more Supreme Court Justices,
Thu May 12, 2016, 03:50 AM
May 2016

and their impact could be felt for decades.

 

Albertoo

(2,016 posts)
3. it's worse than that
Wed May 11, 2016, 01:02 PM
May 2016

because 2007-2008 was a massive hit (the Great Recession)
The stormy waters have been calmed for a while by pouring oil (tons of free money)
But the storm is smoldering under the oil, and the free money supply is drying out..

 

Purveyor

(29,876 posts)
4. That is the problem, the Fed can't prime the pump by lowering interest rates as they are damned near
Wed May 11, 2016, 01:04 PM
May 2016

zero now.

No, a recession of the magnitude of the 2008 recession (it started around 2007 for us in Michigan) will be devastating.

The time is now to start planning accordingly if one hasn't already.

 

Albertoo

(2,016 posts)
7. Oh, it won't be 'another' 2008, it's the same
Wed May 11, 2016, 01:08 PM
May 2016

Like I said, all the free money pumped by the Fed and Draghi have bought time, but the downward cycle was kindled with no real fix.

On a gloomier note, what fixed 1929 was not really Keynes but WWII.
Seeing the rise in nationalism everywhere, I hate the comparison, but..

PETRUS

(3,678 posts)
9. Re 1929:
Wed May 11, 2016, 01:42 PM
May 2016

Keynes/WWII... one and the same. WWII made expansive fiscal policy acceptable (or imperative, even). There's nothing special about wartime spending except that our elected representatives aren't so reluctant with the purse strings.

 

Albertoo

(2,016 posts)
10. Keynes/WWII... one and the same is apparently not what the new studies say
Wed May 11, 2016, 10:36 PM
May 2016

I must confess to not having read into it, but the new consensus of economic historians seems to be that the New Deal wasn't working (yet?) when war broke. It seems the latest number crunching shows the uptick started with the war. Correlation or causation is more difficult to decide.

PETRUS

(3,678 posts)
11. What new studies?
Wed May 11, 2016, 11:27 PM
May 2016

The data is plain. Look at federal spending by year from 1930 to 1946 and it's perfectly plain what happened. Outlays went from a few percent of GDP to 10% in 1934 and stayed around 8-10% for a few years with deficits in the order of 4 or 5% of GDP (this is the New Deal in action), then outlays started going up in 1941 and peaked at 42% of GDP with deficits of 20% to almost 40% of GDP (this is WWII). WWII was the proximate cause for the increase in spending but the results were because of the spending, not the war.

 

Albertoo

(2,016 posts)
12. I got it from a 'cloud'
Wed May 11, 2016, 11:50 PM
May 2016

I read a fair bit of economic papers from a rather wide spectrum of sources, and I notice in the new century increasingly frequent remarks "in passing" about studies that put in doubt the fact the New Deal solved the economic downturn (it's possible nothing could have)

However, this does not mean Keynes and Roosevelt were wrong: the crisis was so terrible it was essential to put people back to work and regain livelihoods. All I believe these studies say is that the New Deal cured the symptoms, but that it did not -and that any policy could not- cure a downturn which had been caused by massive prior mistakes (and the cyclical nature of the economy as we know it)

PETRUS

(3,678 posts)
14. I too read a fair bit of economics.
Thu May 12, 2016, 09:21 PM
May 2016

This study sounds like bunk. (Of course, economic theory predicts a well-funded market for right wing claptrap.) The public spending related to WWII (way higher than the New Deal) produced an economic boom. If the government had decided on something closer to that kind of spending for the New Deal, with ample financial support for basic research and industrial mobilization, we would have had an economic boom sooner. That kind of stimulus won't work if the resources (labor, skills, raw materials) aren't available, but clearly they were.

 

Albertoo

(2,016 posts)
15. Well, you don't have to trust me, but..
Thu May 12, 2016, 09:29 PM
May 2016

..I am fairly good at picking 'clouds' and 'beams'

it's quite a bit of references I picked to a newly forming consensus on the New Deal

 

just4lulzidk

(60 posts)
5. no surprise here. the market's cyclical, and after the records highs, a pull back is def possible
Wed May 11, 2016, 01:05 PM
May 2016

and if that's the case, i just hope y'all aren't some of those folks out there who couldn't afford a few hundred dollars if an emergency ever struck

personally, if there's another recession, i'll be buying buying buying into the market

Thirties Child

(543 posts)
6. Big recession and aggressive congress
Wed May 11, 2016, 01:08 PM
May 2016

Fwiw -- and it won't be worth anything to most of you -- I looked at an astrological chart for the inauguration. Whoever is elected is going to have to deal with an aggressive, ready-to-fight congress and major money problems. One may precipitate the other -- congress causing a major recession/depression.

Let the flames begin.

Wounded Bear

(58,440 posts)
8. We do tend to over-emphasize what the Pres can do about the economy...
Wed May 11, 2016, 01:18 PM
May 2016

much of the 'slowness' of the recovery was due to Repub intransigence. I'm starting to think they want to lose this cycle so they'll have another Dem to blame the coming troubles on.

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