Ever since the crisis of 2008 Americans have been asking ‘when will we finally get back to normal?’
We now have a target date.
Forget the green shoots of 2009, or the real estate recovery of 2010, the resurgence of minimum wage jobs in 2011, or the stock market records of 2012 and 2013.
None of those really made a difference for Americans on the ground.
2014. That’s the new target date.
CNN reports that’s when things are going to get better according to a growing consensus of well respected economists.
But next year, economists foresee a convergence of several factors that could finally kick this recovery into high gear.
First on the list is the federal budget. After epic fights this year over the “fiscal cliff,” the “sequester,” and a bunch of other wonky stuff, lawmakers have finally managed to cobble together enough tax hikes and spending cuts to at least stabilize the country’s credit rating.
Rising home prices are helping, too. Fewer Americans are trapped in underwater mortgages that leave them owing more on their home than the house is worth. Rising prices also boost the net worth of homeowners, adding to consumer confidence.
Businesses have been complaining for years about “uncertainty” in the public policy area. Next year, some of those unknowns will finally be resolved.
Companies have held off on hiring because they’re waiting to see how they’ll be affected by health care and finance reform laws, according to John Silvia, chief economist at Wells Fargo. The implementation details of both of those laws will become clearer over the next year.
“Dodd-Frank and Obamacare need to be worked out, then employment takes off,” Silvia said.
He believes 2014 “could be a very good year.”
Just how good? Steve Blitz, chief economist at ITG Investment Research, thinks GDP growth in the 3.5% to 4% range is possible for 2014, if the global economy doesn’t deteriorate. Monthly job growth could peak in the 300,000 range, he believes.
Blitz anticipates a large numbers of Millennials entering the car-and-home-buying stage of life, giving an added boost to the economy. Plus, the drop in defense spending associated with the draw-down of troops from Iraq and Afghanistan should be largely behind us.
“All of these should add up to a better economy in 2014,” Blitz said.
So, next year is the year folks!
Next year the tax hikes and spending cuts (what?) are going to stabilize our credit rating, because that rating has nothing to do with the trillions of dollars of funny money we’ve been printing at the Fed.
Next year businesses will finally start hiring, once Obamacare is in effect, because those extra thousands of dollars in premiums or fines that small business owners will be forced to pay are a boon for the jobs market.
Next year, after we pull our troops out of Iraq and Afghanistan, there will be a drop in defense spending… except we’re now mobilizing for a war in Syria, and possibly Iran.
And, of course, next year the Millennials will be buying cars and homes to add to their iPhone and Xbox collections. And since there are going to be so many high paying retail and restaurant jobs flowing into the economy, that’s going to drive growth to almost 4% per year, as opposed to the sub 2% we’ve managed to attain through inflationary machinations.
Another driver, as CNN also reports, is that 76% of Americans live paycheck to paycheck, with one in five of our fellow countrymen having less than $100 in savings to deal with emergencies.
Moreover, with just $202 trillion in national commitments to pay off, the future looks bright for generations to come.
If that’s not economic stability, we don’t know what is.
By all expert economic assessment we’re back!
It’s time to book those vacations, max out those credit cards and fire up the barbecue grills.
All together shout it now
there’s no one
who can doubt it now
so let`s tell the world about it now
happy days are here again
Your cares and troubles are gone
there’ll be no more from now on
from now on
Shout it from the roof tops: