Economics Bloggers See Mixed Bag
When a collection of leading economics bloggers were asked to openly assess the overall condition of the economy, the one word that appeared more than any other was ‘uncertain.’ Not surprisingly, two-thirds selected ‘mixed’ when asked in a follow up if the economy was strong, weak or somewhere in between. The Kauffman Economic Outlook survey, released last week by the Kauffman Foundation and conducted by Growthology’s Tim Kane, also explored the reason for persistent high unemployment. An overwhelming 95 percent agreed that uncertainty is making firms reluctant to hire. They also cited structural changes in the demand for labor and a decline in aggregate demand.
So will the recent extension of the 2001 – 03 tax cuts and Social Security tax cuts help jump-start an economic recovery and job creation? The prevailing word there seems to be – eventually. Sixty-six percent of the respondents believe that those measures would be "effective" at some point down the road, but not during 2011.
Other interesting highlights:
- 92 percent recommend that the government "reduce regulatory burdens and fees on new firm formation" rather than implementing policies that would subsidize new firm formation. This level of consensus is noteworthy given the largely nonpartisan identification of the respondents.
- Only 10 percent of bloggers believe the economy is doing better than official statistics indicate.
- Projecting three years ahead, economics bloggers expect global output, inflation, and interest rates to rise faster than anything else. The happy news is that two-thirds of respondents anticipate employment growth in the United States.
- 92 percent favored trade agreements with South Korea, Colombia and Panama. A majority – 72 percent – also supported the adoption of recommendations from the president's deficit commission.