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Economy: is the worst yet to come?
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Ron Paul, a Republican Congressman from Texas, says that The Worst is Yet to Come, on Forbes’ Monday headlines. Despite signs of an economic recovery, and promises of “green shoots” all over the economic landscape, Paul is doubtful that insisting on economic recovery will actually produce a true recovery.
With a gloomy outlook, Paul predicts that the economic recovery be not only be slow and arduous, but the worst is still to come -- and that any signs of a coming recovery is in fact a false recovery. Too much government intervention (too many dollars dependent on taxpayer dollars or printing new money from the central bank) is creating another bubble that is bound to burst.
Get ready for the coming year, which could have modest economic growth, Paul predicts, but be wary of whether this is truly a long term economic recovery. Pumping billions of dollars of government money in to the economy will only prolong the much-needed market corrections that must happen. “This is nothing less than the creation of another bubble,” he says, and what will follow the short recovery will be “a drop in growth worse than anything we’ve seen in the past two years.”
It’s always good to be cautiously optimistic – and while many economists are eager to put good news into today’s headlines, it’s unclear whether the economy is truly recovering or is in for another series of corrections before we see any steady job growth. Perhaps some pragmatic pessimism is in line for a few more months. Consumers, save money. Keep building your retirement funds and your emergency savings accounts. Saving for a rainy day is still necessary (as it always should be). Polish your resume and stay active in your current job market. Getting a job is harder than getting into MIT, so if you have a job with a means of positive cashflow, do your best to stay in the black -- this country is in pretty big debt already.
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