Expert: U.S. won’t rebound to pre-recession numbers until 2025
by Sheri Kell
November 28, 2012 12:51 AM | 4153 views | 4 4 comments | 9 9 recommendations | email to a friend | print
Economic expert Dr. Albert W. Niemi Jr. says if tax cuts created by former President Bush expire, it will be ‘a job killer’ and will ‘hammer the middle class.'<br>Staff/Laura Moon
Economic expert Dr. Albert W. Niemi Jr. says if tax cuts created by former President Bush expire, it will be ‘a job killer’ and will ‘hammer the middle class.'
Staff/Laura Moon
slideshow
Neimi, dean of the Edwin L. Cox School of Business at Southern Methodist University, delivered his annual economic forecast to a crowd of 500 business and civic leaders at the Cobb Performing Arts Centre on Tuesday morning. The annual breakfast gathering now is in its 20th year.<br>Staff/Laura Moon
Neimi, dean of the Edwin L. Cox School of Business at Southern Methodist University, delivered his annual economic forecast to a crowd of 500 business and civic leaders at the Cobb Performing Arts Centre on Tuesday morning. The annual breakfast gathering now is in its 20th year.
Staff/Laura Moon
slideshow
GALLERIA — If the economy continues to recover at current rates, the country will not fully rebound to pre-recession numbers until 2025, predicts economist Albert W. Niemi Jr., dean of the Edwin L. Cox School of Business at Southern Methodist University.

“The news is not great,” Niemi told the more than 500 people who came to the Cobb Performing Arts Centre on Tuesday to hear his economic forecast. The annual breakfast event, now in its 20th year, is conducted by the Bank of North Georgia.

“It is unprecedented how sluggish this recovery has been,” Niemi said. He predicts that growth in gross domestic product will slip from 2 to 1.9 percent in 2013, far from the 4 percent number it should be at this point of the recovery based on historical economic trends.

Niemi also believes the unemployment rate will fall from this year’s average of 8.2 to 7.9 percent next year. He said that while the unemployment rate is currently 7.9 percent, the true rate is just below 15 percent when accounting for the underemployed.

He warned that if the “Bush tax cuts” expire, it would be “a job killer” and will “hammer the middle class.”

“The biggest thing holding this economy back is uncertainty,” Niemi said.

He said changes to health care laws, which will not be fully implemented until 2014, are adding to the uncertainty.

“A lot of businesses are holding back until they know the costs,” he said.

The former University of Georgia professor did impart a small degree of optimism for Georgia.

Niemi predicts most of the nation’s growth will occur in the Sun Belt and that metro Atlanta will fare far better than the rest of the nation because of its accessibility and quality of life.

He said the keys to job creation remain constant: low taxes; low land, labor and energy costs; non-union markets; location advantages; a business-friendly environment and a favorable quality of life. He highlighted Georgia’s population growth from 2004 to 2010, which ranked it the third highest in the country.

Niemi also explained why the nation’s shift from manufacturing to retail and hospitality has lowered its position globally and has affected many states in particular, including Georgia.

“No state in the nation’s manufacturing was more tied to the residential housing market than Georgia,” he said.

He said that while the new housing starts are rising annually again, the number of homes being built is dramatically below those of every year between the end of World War II and the beginning of the recession.

Retired banker Rod Knowles has attended nine of Niemi’s annual forecasts.

“It’s not a rosy picture,” Knowles said. “We’ve got a lot of systemic weaknesses that have to be addressed, and Washington has got to take the lead.”

But David Connell, president of the Cobb Chamber of Commerce, said there was good news for Cobb County.

“The facts are discouraging, but you have to do what you can do with what you have today,” said Connell. Citing that Cobb County’s attributes directly mirror Niemi’s keys to job creation, he said “We are positioned in Cobb in a fairly unique way.”

Lisa A. Rossbacher, president of Southern Polytechnic State University in Marietta, said she was particularly listening for implications for higher education.

“I was glad to hear the positive projections about new housing starts, even if the rate is not as high as it was before 2008, because the residential housing market directly affects job opportunities for many of our graduates, including those in construction management, architecture, and civil engineering technology.”
Comments
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Carey Cox
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November 29, 2012
The premise of returning to where the economy "was" is flawed. The economy was running at a pace that was unsustainable. Regardless of who is "running" Washington, we in private enterprise will make the economy move. It is also those of us on the street making it happen everyday that have our hand on the pulse of the economy. We are not pondering it, we are doing it.

A recovery is already underway in real estate and mortgages which, hopefully, will bring the rest of the economy around. Statistics are nice but with an unrealistic baseline I disagree with the analysis. I will never see and my children will never see an economy as hot as it was pre-recession. I pray they don't it was an economy based on too much free flowing credit, a false economy. Credit standards were tightened too much and now are back to the pre-subprime boom standards which are reasonable. Money is starting to flow again.

This is not a commentary on the election one way or the other. Again it is my strong belief it is "We the People" that make this economy run in spite of Washington, not because of Washington. I know, I show up to work everyday and most weekends and am in the middle of the real estate industry. We are making the comeback now and will continue to.
Christian M.
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November 28, 2012
Well the country could've had it better.

They were offered four more years of this or a guy with a plan and a track record of turning things around. It is still stunning to me that the country picked more stagnation, drifting along, hardship, and national decline.

CBS News reported on Romney's plans that he already had in place in the event he had won. They said that in the future anyone hoping to become president would be wise to study his plans and replicate it. They said essentially he had a very comprehensive, thoughtful series of steps and action items all ordered and ready to go soon after the swearing in. Mr. Romney planned to waste little time.

I am sure there are those who disagree and obviously the majority of the electorate does disagree but I will always believe it was a tragedy that the election turned out the way it did.
Bob Bummer
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November 28, 2012
By 2025 some of those 30-somethings living in their parents basements will be 50-somethings by the time jobs are abundant.
TC Dallas, TX
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December 14, 2012
And then... They are pretty much unemployable with age bias AND lack of experience. Entrepreneurship looks to be the best path to prosperity for those, and for the older un- and underemployed. It is a new world with new rules for sure.
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