Last week we wrote that investors and corporate executives believe the U.S. will slip into recession in the next two years. Business economists agree. The Associated Press reports,
Roughly half the nation’s business economists say they think the U.S. economy will slip into recession by the end of next year, and three-fourths envision such a downturn beginning by the end of 2021.
The finding comes from the latest survey by the National Association for Business Economics of its member economists. Just 10 percent of them say they foresee a recession beginning this year.
That “roughly half” is a generous rounding up. The NABE survey summary is more precise, and equally troubling.
“Three-fourths of the NABE Policy Survey panelists expect an economic recession by the end of 2021,” said NABE President Kevin Swift, CBE, chief economist at the American Chemistry Council. “While only 10% of panelists expect a recession in 2019, 42% say a recession will happen in 2020, and 25% expect one in 2021.
These projections should temper the ambitious spending plans being considered by state budget writers. Washington has enjoyed a remarkable run, allowing lawmakers to boost state spending 44 percent in the last decade. Gov. Inslee proposed an additional 22.3 percent increase in spending in his biennial budget plan, relying on new taxes.
Although state revenue collections continue to outperform the November forecast, a slowdown is surely coming. Although there’s some disagreement on the timing, the best projections place the coming recession in the middle of the next biennial budget. The March 20 revenue forecast will provide lawmakers additional guidance. But it’s clear: sustainability should be a priority. And, we’d add, sustainable budget practice would avoid tax and regulatory policies that would jeopardize economic growth here.