Economic Outlook 2012 - Economy
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It takes considerable time for countries to rebound from major financial crises. Thus, excessively high unemployment will continue to hamper a speedy resolution of our economic problems. Corporations are not hiring because of new federal programs and regulations. Furthermore, the dangers of overspending have not been adequately addressed at the federal level. This is sowing the seeds of inflation.
As we previously projected, the U.S. has bounced along at low levels of economic activity, with feeble GDP increases. The business community has received little encouragement from Washington. Still, Americans are resourceful and we see a country that is stabilizing and slowly improving. Except for the situation in Europe, we would be very hopeful about the future. About 20% of our exports go to Europe and many U.S. firms have a major presence there. Bond investors forced many European yields to unsustainable levels as high debt levels and confidence in repayment lagged. A recession in Europe will also threaten the U. S. economy.
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Negatives |
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The Federal Reserve's policies are accommodative |
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Political uncertainty in Washington |
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Interest rates are low |
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New government programs and overspending are unpopular among voters |
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Exports thrive for now |
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Problems in Europe and a stronger dollar will slow exports |
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Untapped energy reserves in the U.S. |
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Excessive unemployment inhibits spending |
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