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Economic Outlook 2010 - Economy |
Economic activity should revive a bit, but
vigorous expansion is not likely. High
unemployment and lethargic retail sales
coupled with fewer job openings and thrift
among consumers foretell prolonged
weakness. Washington has attempted to
counter with three massive spending
programs to no avail.
Some indicators signal better days ahead.
However, policies supporting higher taxes,
restricted trade, wealth redistribution, more
regulations, and expanded government
activities will restrain growth.
Trade is a bright spot, worth approximately
$3.5 Trillion, nearly 25% of GDP. The
cheaper dollar makes US businesses and
products more attractive to foreign buyers.
Our research shows exports rise nearly 66%
faster when the dollar is falling.
Eventually the current recession will have
positive effects such as stronger reserves
among businesses and healthy caution
among investors.
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| Positives |
Negatives |
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Federal stimulus a short-term help |
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Tax increases loom |
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Banking, financial crisis abating |
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Washington punishes success |
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Cheaper dollar enhances exports |
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Government controls stifle expansion |
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FED increases money supply, supports lower interest rates |
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Business investment lags |
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Increased savings is negative short-term but beneficial long-term |
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Consumers restrain spending |
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Excessive money growth leads to high future inflation |
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