Published: Wednesday November 5, 2008
A United States economics professor is telling the Caribbean to brace for the effects of a United States recession, warning that things could get worse before they get better.
Professor of economics at Northeastern Illinois University, Dr Edward Stuart, said it will be at least another full year before the United States emerges from a recession.
"We will have more inflation," he said yesterday, as voters across the country went to the polls to elect a new president to lead the country through the economic turbulence.
"The statistics that I look at and the people that I pay attention to say that the United States will be in recession throughout 2009; that the debt of the typical American household – credit card and mortgage debt – is probably at unsustainably high levels, so people will have to cut back on spending and increase on saving and repaying loans and that's not good for recovery.
"My suspicion is that we'll come out of the recession somewhere around the beginning of 2010 and that's being optimistic," he said, responding to questions by a group of foreign journalists.
Stuart said that whoever emerges victorious in the presidential race – either Democrat Barrack Obama or John McCain of the Republican Party – will have a hard task.
"I wouldn't want to be the president next year because that's going to be a tough job," he said, noting that although the president will be able to slightly influence the direction which the economy takes through fiscal or monetary policy, it will take some time to see results.
"The shortest possible effect is probably six to 12 months. Let's say that in January there is a new fiscal stimulus package and it is very robust and powerful, it will have an effect by summer at the earliest," Professor Stuart explained.
Meantime, the economics expert has suggested that Obama critics who charged that the African American will bring socialism to the United States through his tax policies are off the mark. Obama has been accused by Republicans of having a socialist agenda ever since he said that his plan is to "spread the wealth around".
Source: Nation Newspapers