Alternative Visions – The ‘R’ Word and the US Economy—Recession or Relapse? – 02.05.16

Jack reviews indicators for the US economy for January and addresses the growing commentary on whether the US will enter recession this year. His prediction: ‘Relapse’ (a one quarter stagnation or contraction) is definitely likely, followed by a boost in government spending in the election year this summer. Recession on the agenda in 2017 for certain, if not sooner. Jack also reviews the major economic events of the past week, including the Iowa caucuses and Sanders’ capture of 87% of the youth (18-34 years) vote. The breakup of the Obama coalition and why Hillary should be very worried. Jack’s latest article, ‘The $10 Trillion Tax Giveaway’ (see his blog, jackrasmus.com) is reviewed, showing how politicians from Bill Clinton to Obama have given more than $10 trillion in tax cuts to investors and corporations, and how each of the Republican candidates are proposing another $10 trillion. Other events of the past week are discussed: Europe’s coming further QE, China’s $5 trillion in nonperforming bank loans, Ukraine minister resigns, and Martin Skrelli and big Pharma rip offs continue. Evidence of US economy softening in services PMI, jobs, manufacturing PMI, housing, states’ spending, business inventory de-stocking, and consumer spending slowing is reviewed.