ARTICLE
BETHLEHEM, Pa. - It is one of the biggest questions on the minds of business leaders and workers across the Lehigh Valley: what is the economic outlook for 2017? "It's really too early to know right now." Those are the words of Dr. Jay Bryson, a Wells Fargo economist whose job it is to predict what will happen to the U.S. economy. This year, his profession may be more difficult than ever before. On Tuesday, the expert on global finance gave the featured presentation at the Greater Lehigh Valley Chamber of Commerce Economic Outlook Luncheon held at SteelStacks’ Artsquest Center. About 700 people, an all-time record according to organizers, packed the building for the event. In spite of the large jubilant crowd, and several other speakers striking an optimistic tone about the Lehigh Valley's economic prospects for the next year, Bryson was reluctant to attempt a concrete prediction for 2017 amidst the volatile political landscape of the United States. What does he see more than anything? Uncertainty. That said, Bryson did attempt to lay out some plausible scenarios for what we might face in the next year. If economic policies remain the same, he doesn't see a recession coming. In fact, he's expecting the United States' real GDP to continue expanding at about 2.5 percent, or even potentially higher. He also expects growth in the amount of disposable income Americans possess, and for consumer spending to grow at a steady rate, which he says are good signs of a healthy economy. Of course, the operative words in his prediction are "if economic policies remain the same." As we've already seen in the first few days of the Trump administration, the political earthquake that shook Washington in November is almost surely going to change the path we’re on. The million-dollar question is how. And that’s where things get tricky. Dr. Bryson sees some potential good in the policy proposals President Trump has made and the actions he's taken since assuming office, but also had some sharp warnings about damaging moves the president could potentially make. The economist paid particular attention in his speech to taxes, spending and trade. TAXES & SPENDING President Trump and the Republican-controlled Congress want to cut taxes for all Americans, and the president has said he wants to pass a trillion dollar infrastructure plan. Bryson thinks those things could have a short-term stimulative effect on the economy and immediately boost growth, but he also sees a downside. While Trump and his allies have claimed the tax cuts and spending will cause such a massive boom that they will be revenue neutral and pay for themselves, Bryson had a more stark analysis. "I've got news for them…that's not gonna happen". According to Bryson, in spite of any potential growth from tax cuts, current deficits are simply too great to eliminate without slashing spending. And, if federal budgets stay on their current trajectory, that’s something unlikely to happen in the coming years. The bottom line: unless spending is cut, the 20 trillion dollar national debt of the United States will continue to grow, which Bryson says is a long-term problem for the economy. TRADE When it comes to trade policy, Dr. Bryson took a more pessimistic view. "During the campaign," says Bryson, "President Trump said some, shall we say, provocative things about our trading partners." The president has indeed taken an aggressive posture towards many countries regarding trade, particularly China. He’s labeled the country a currency manipulator, and repeatedly has insisted they are “ripping us off on trade”. He’s also threatened potential action against them, including steep tariffs, which Bryson sees as problematic. "I would think a trade war would not be a good thing." According to Bryson, while some argue that policies like Trump's would lead to more goods being produced in the United States, the reality is much different. "It'll raise prices." Nevertheless, the president has already indicated he plans to overhaul U.S. trade policy in whatever way he can. This week, he took executive actions formally withdrawing the United States from the Trans-Pacific Partnership pursued by President Obama, and stating his desire to renegotiate the North American Free Trade Agreement. In the end, Dr. Bryson says policy uncertainty and global instability make it impossible for him to give a clear forecast for what to expect in 2017. While the economist's predictions may have been tepid, the event ended on a high note, with organizers shooting dollar bills from party cannons into the crowd. Only the future will tell whether the optimism of local business leaders is well founded. Read the original article here.
BETHLEHEM, Pa. - It is one of the biggest questions on the minds of business leaders and workers across the Lehigh Valley: what is the economic outlook for 2017?
"It's really too early to know right now."
Those are the words of Dr. Jay Bryson, a Wells Fargo economist whose job it is to predict what will happen to the U.S. economy. This year, his profession may be more difficult than ever before.
On Tuesday, the expert on global finance gave the featured presentation at the Greater Lehigh Valley Chamber of Commerce Economic Outlook Luncheon held at SteelStacks’ Artsquest Center. About 700 people, an all-time record according to organizers, packed the building for the event. In spite of the large jubilant crowd, and several other speakers striking an optimistic tone about the Lehigh Valley's economic prospects for the next year, Bryson was reluctant to attempt a concrete prediction for 2017 amidst the volatile political landscape of the United States. What does he see more than anything? Uncertainty.
That said, Bryson did attempt to lay out some plausible scenarios for what we might face in the next year. If economic policies remain the same, he doesn't see a recession coming. In fact, he's expecting the United States' real GDP to continue expanding at about 2.5 percent, or even potentially higher. He also expects growth in the amount of disposable income Americans possess, and for consumer spending to grow at a steady rate, which he says are good signs of a healthy economy. Of course, the operative words in his prediction are "if economic policies remain the same."
As we've already seen in the first few days of the Trump administration, the political earthquake that shook Washington in November is almost surely going to change the path we’re on. The million-dollar question is how. And that’s where things get tricky.
Dr. Bryson sees some potential good in the policy proposals President Trump has made and the actions he's taken since assuming office, but also had some sharp warnings about damaging moves the president could potentially make. The economist paid particular attention in his speech to taxes, spending and trade.
TAXES & SPENDING
President Trump and the Republican-controlled Congress want to cut taxes for all Americans, and the president has said he wants to pass a trillion dollar infrastructure plan. Bryson thinks those things could have a short-term stimulative effect on the economy and immediately boost growth, but he also sees a downside.
While Trump and his allies have claimed the tax cuts and spending will cause such a massive boom that they will be revenue neutral and pay for themselves, Bryson had a more stark analysis.
"I've got news for them…that's not gonna happen".
According to Bryson, in spite of any potential growth from tax cuts, current deficits are simply too great to eliminate without slashing spending. And, if federal budgets stay on their current trajectory, that’s something unlikely to happen in the coming years.
The bottom line: unless spending is cut, the 20 trillion dollar national debt of the United States will continue to grow, which Bryson says is a long-term problem for the economy.
TRADE
When it comes to trade policy, Dr. Bryson took a more pessimistic view.
"During the campaign," says Bryson, "President Trump said some, shall we say, provocative things about our trading partners."
The president has indeed taken an aggressive posture towards many countries regarding trade, particularly China. He’s labeled the country a currency manipulator, and repeatedly has insisted they are “ripping us off on trade”. He’s also threatened potential action against them, including steep tariffs, which Bryson sees as problematic.
"I would think a trade war would not be a good thing."
According to Bryson, while some argue that policies like Trump's would lead to more goods being produced in the United States, the reality is much different.
"It'll raise prices."
Nevertheless, the president has already indicated he plans to overhaul U.S. trade policy in whatever way he can. This week, he took executive actions formally withdrawing the United States from the Trans-Pacific Partnership pursued by President Obama, and stating his desire to renegotiate the North American Free Trade Agreement.
In the end, Dr. Bryson says policy uncertainty and global instability make it impossible for him to give a clear forecast for what to expect in 2017.
While the economist's predictions may have been tepid, the event ended on a high note, with organizers shooting dollar bills from party cannons into the crowd. Only the future will tell whether the optimism of local business leaders is well founded.
Read the original article here.