Economic Bloggers Forecast Weak Growth and High Deficits
Optimism is out; pessimism is in among the country's top economics bloggers as they look to 2012 and beyond— particularly regarding jobs. A new Kauffman Foundation survey released last week shows that only 50 percent of respondents to its ongoing series of anticipate employment growth, a decrease of 20 percent from second quarter.
Fully 95 percent of respondents to Kauffman Economic Outlook: A Quarterly Survey of Leading Economics Bloggers view current economic conditions as "mixed" or "facing recession," an increase of 10 percent from second quarter, and a third predict a double-dip recession during 2012. "Uncertain" is once again the top adjective economics bloggers use to describe the economy, and respondents shared expectations of higher annual deficits and the top marginal tax rate.
"This quarter's survey provides an unprecedented level of pessimism about the state of the U.S. economy among top bloggers," said Tim Kane, the survey's director and a senior scholar at the Kauffman Foundation. "But, it also contains a handful of unique questions submitted by bloggers themselves that offer new perspectives and new directions forward."
As the debt controversy finally comes to a close on Capitol Hill, the consensus of economics bloggers was strong, but neither conventionally liberal nor conservative. More than half support raising the U.S. debt limit without conditions. But a strong majority – 88 percent – also favors the idea of a requirement for the Congressional Budget Office (CBO) to account long-term liabilities in its budget assessment.
When asked to evaluate the 2009 stimulus, 77 percent of economics bloggers believe that it had a neutral or negative effect. Looking forward, when asked how fiscal balance should be achieved, respondents favored a mix weighted toward spending cuts rather than tax increases.
Other research highlights include:
- Weighing in on the FTC investigation of Google, 54 percent of economics bloggers believe the government actually will file suit against Google, while 93 percent believe the suit lacks merit.
- Although the panel is largely nonpartisan, almost two-thirds of top economics bloggers believe the government is too involved in the economy. The top policy recommendation remains for the government to "reduce regulatory burdens and fees on new firm formation."
- When asked to evaluate other budgetary policy proposals, two were favored by 57 percent of respondents: capping tax credits and deductions per household, and converting Medicare to a premium support program.
- One bright note: almost half of respondents (44 percent) expect U.S. growth to return to the steady 2 percent annual rate, with roughly equal numbers expecting 1 percent slower (18 percent) and faster (14 percent).
- Asked for their predictions about 2012, economics bloggers revealed low confidence in the Euro, with 32 percent believing it will not exist in 2014. Opinion is split 47-53 on whether Greece will abandon the Euro within the next eighteen months. Respondents were similarly concerned about U.S. Treasury prices, with 23 percent anticipating a collapse.