Not a Happy New Year Ahead
Jul 31, 2020102.6K Shares4.4M Views
If you think the economy is in trouble now, just wait. Bloomberg looksahead a few months and predicts things will be getting even worse. Its survey of economists predicts a slump going well into 2009, as consumer spending finally slows down after its longest expansion on record.
What’s also interesting about the Bloomberg report is that economists see only a temporary boost to the economy from the stimulus checks, the last of which were sent out in July. When the stimulus package was approved back in February, the ideawas to either prevent a recession or to limit any possible downturn. But the rebates don’t seem to be doing much to prop up the economy, according to the survey. It notes the impact of the rebates will be all but gone by the fourth quarter of this year. Here’s more on the gloomy outlook, from Bloomberg:
“„Household spending, which has grown every quarter since 1992, is projected to stall in the last three months of the year as the impact of tax rebates fades,wagesfail to keep up with inflation and property values fall. The jobless rate, now at 5.7 percent, will reach a five-year high of 6 percent in early 2009.“The consumer is very much squeezed,” said John Lonski, chief economist at Moody’s Investors Service Inc. in New York. “The downside risks swamp whatever the economy’s upside potential would be.”
Either the economy was in far worse shape than anyone realized when the stimulus package was approved, or the benefits of the checks were overestimated. It’s probably a combination of both, and a warning for the next time Washington decides to fix the economy’s structural problems by sending out free money from the government.
Dexter Cooke
Reviewer
Dexter Cooke is an economist, marketing strategist, and orthopedic surgeon with over 20 years of experience crafting compelling narratives that resonate worldwide.
He holds a Journalism degree from Columbia University, an Economics background from Yale University, and a medical degree with a postdoctoral fellowship in orthopedic medicine from the Medical University of South Carolina.
Dexter’s insights into media, economics, and marketing shine through his prolific contributions to respected publications and advisory roles for influential organizations.
As an orthopedic surgeon specializing in minimally invasive knee replacement surgery and laparoscopic procedures, Dexter prioritizes patient care above all.
Outside his professional pursuits, Dexter enjoys collecting vintage watches, studying ancient civilizations, learning about astronomy, and participating in charity runs.
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