While walking to work this morning I thought about news of the last day; that we’ve been in a Recession since December 2007 (one year!), that several of my friends have already lost their jobs, that rents and other fixed expenses continue to rise, but income is falling and the economy,as a whole, is moving toward Deflation.
My mind races to paint a picture of what we’re likely to see next year and what I came up with, is this.
Economy continues to go deeper into recession as Barack Obama takes office in January 2009; the first stimulus package is passed by early Feb and the first money for stimulus flows out of the Tresuary in late April 2009. Unfortunately, the stimulus is too late to help the unemployed and nothing much happens.
A second stimulus happens in late 2009, but 2009 is already a wash out, and it’s not till spring of 2010 that employment starts to grow again, and not till 2011, before it recovers to a pre recession level. I think a third stimulus will happen in early 2010, and that will seal the recovery.
In all, about 2 Trillion Dollars will be spent over the next two years, trying to revive the economy, and that had nothing to do with stimulus going on in other countries at the same time.
I expect the usual challenges that everyone is talking about, but the problem is going to be, how to survive through 2010.
And the problem is that there’s going to be a lot of difficulty around “uncertainity” in when the economy will recover.
Maybe, the best thing Obama can do, at this point, for the economy is bring a sense of certainity back to the markets and to provide as many alternative energy jobs as he can create.
Of course, this is all my own views (no one else’s) and I may be all wet.
Btw, this post was written on my iPhone, expect the usual spelling and grammar errors.