Reasons to be pessimistic about the American economy

Louis Proyect lnp3 at
Wed Dec 22 09:39:08 MST 1999

Seven Unsustainable Processes

Medium-Term Prospects and Policies
for the United States and the World

Wynne Godley

The U.S. economy has now been expanding for nearly eight years, the budget
is in surplus, and inflation and unemployment have both fallen
substantially. In February the Council of Economic Advisers (1999) forecast
that GDP could grow by 2.0 to 2.4 percent between now and the year 2005,
and this forecast has since been revised upwards (Office of Management and
Budget 1999). Many people share the CEA's optimistic views. For instance,
in his New Year message (Financial Times, December 29, 1998) Alan Blinder
compared the United States's economy to one of its mighty rivers--it would
"just keep rolling along"; and President Bill Clinton concluded his
Economic Report of the President with the words "There are no limits to the
world we can create, together, in the century to come." This paper takes
issue with these optimistic views, although it recognizes that the U.S.
economy may well enjoy another good year or two.

complete report at

Louis Proyect

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