Global warming, nuclear proliferation, failing schools – the world outside our windows presents us with challenging problems. But for the American economy, at least, finding a way to grow has not been one of them. Businesses and households are still investing and placing bets on a rosier future, and for five consecutive years now, those predictions have proved accurate.
But a new year brings on a new challenge and a new question – how will the U.S. economy keep this winning streak alive? The 2007 economy will have to get along without the effortless injection of cash provided by the run-up of housing prices in the first half of the decade. After using their houses like ATM machines for several years running, look for consumers to be spending within their means in the coming year now that home prices are moving in the opposite direction.
That may sound to you a little like the stock market decline that presaged the 2001 recession. But few economists are making that call just yet. And that makes this year’s presentation of the outlook especially timely. Because economic growth doesn’t go on forever, recessions do happen, and those who see the warning signs can be better prepared.
We are grateful to the Muncie Rotary Club and the Muncie Sunrise Rotary Club for hosting this event.