Great Recession Effects on GDP
- Housing still bad, nearing bottom—still a drag for next year
- Energy prices a drag—for next few years.
- Effect of democratic movements in Middle East on oil and defense expenditures—unclear, but certainly a risk
- Stimulus ending and QE2 ending—neutral for next year
- Downsizing government, Tea Party goal—if greater than 10%, will take 5 years minimum to convert ending government activity to replacement free market enterprises. Does not address value of change, just lag in adjusting to it
- Unemployment will likely increase due to deficit trimming
- Result—GDP growth will be weak for next 3-5 years