Do Top Economists Really Know?

WASHINGTON – On Tuesday top world economic experts predict that the United States economy will grow in 2012.

This reports comes right after the statement by IMF chief Christine Lagarde who announced over the weekend that the world economy is in trouble and that the projected 4 percent growth for 2012 will most likely be closer to half that number.

The U.S. economy’s well being is for a large portion dependent on how the rest of the world manages to keep its head above water; especially where Europe is concerned.

Lagarde in particularly said that the European economy will continue to slack unless experts there can come up with a much better plan to spruce the situation up again. She added that if Europe’s economy continues to be in a slum, even powerhouses like China, Russia and Australia will begin to feel the pinch.

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Yet despite this statement by one of Europe’s leading experts, U.S. economists continue to portray an optimistic picture in economic growth, knowing full well that if Europe’s economy is weak, the same will most likely be true for the U.S..

Although 3 dozen private, corporate and academic economists expect the economy to grow 2.4 percent in 2012, they do warn that unemployment will continue to hover around 8.6 percent, despite 2011 ending with a positive five-month long streak of generating 100,000 jobs per month.

Are these experts taking on a ‘play it safe’ approach to an economy that, locally and globally, will probably continue to be sluggish at best?

Is this a statement wrapped in a blanket of ‘don’t blame me’ attitude if the economy stays the same or gets worse while at the same time looking for that ‘I told you things would get better’ tap on the shoulder should the economy outperform expectations?

As long as individuals remain unemployed for the most part, the chances of building a booming economy are close to null. Money needs to go around in order to make it work productively.

When one part of the money cycle is broken, in this case employment, the continuing flow of money gets interrupted and the economy continues to struggle.

Proof: Sears Holding Corp, an American institution is closing 100s of Sears and Kmart stores!

Unless the United States focuses on creating a multitude of new jobs that aren’t part-time or temporarily, the U.S. economy will continue to grow at a snail pace.

And as long as the U.S. economy isn’t getting a boost, it remains vulnerable to collapsing.

Dean Maki, chief U.S. economist at Barclays Capital, says the U.S. economy remains vulnerable to an outside shock. A big threat is the risk that Europe’s debt crisis will trigger a worldwide credit freeze.

A shock to the U.S. economy, he says, might not be as dangerous if it were growing at a healthier 4 percent to 5 percent annual pace. But when growth is stuck at 2 percent or 3 percent, a major global crisis could stall job creation and raise unemployment.

Why then all the hype about the United States economy growing in 2012 when the same experts who predict the growth also express great concern about a possible slowdown, maybe even a collapse?

In one word: elections.

The 2012 U.S. Presidential elections are only 11 months away. There are votes to gain and prestige to build. An economy that is reported as being in the upswing is the perfect tool to get these votes.

READ:
 World Economy Is In Trouble
 America’s Economy Going Backwards

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