Yesterday we cited the bleak Q1 economic news. Today, Seattle Times business columnist Jon Talton asks, “Dare we speak the ‘R’ word?” Then he speaks it.
Considering that the average duration of a post-World War II business cycle is about 56 months and this expansion, disappointing as it has been for most Americans, has run about 70 months… Is it time to worry about the “R” word — recession?
Probably.
Read the column to follow his reasoning. He walks the ‘probably’ back a bit in his conclusion.
So the “R” word, probably not. But stagnation can be pretty ugly.
Our piece yesterday talked about the importance of public policy in withstanding the negative effects of a national slowdown or stagnation. Talton’s column provides a nice bookend for the op-ed by former Senate Majority Leader Rodney Tom, which asked the question, “Did Olympia learn anything from the recession?” (We commented on the Tom commentary here.)
Tom pointed out that during boom times, state spending grew at an unsustainable pace. The recession forced lawmakers to retrench. We reviewed that history in our research, recommending that lawmakers “Budget for long-term sustainability and prosperity.” Here’s our reasoning:
Over time and throughout various economic conditions, the State of Washington has experienced cycles of boom-and-bust budgeting. Programs have been expanded during the good times — sometimes at rates exceeding the growth in revenues — and then sharply contracted in the downturn. That uncertainty has taken a toll on students, families, public employees, and those relying on public services. These fluctuations also directly impact the employer community as increased taxes and fees are often proposed to generate the additional revenues required to maintain these programs.
A commitment to sustainable budgeting replaces this uncertainty with stability, supporting long-range planning and assuring that a consistent level of vital services can be maintained in varying economic conditions.
There’s a strong likelihood that the Q1 slowdown is aberrant, that recession can and will be avoided. But the possibility of stagnation or worse should keep lawmakers focused on the sustainable budgeting and public policies that promote economic vitality and shared prosperity.
