If The Recovery Doesn't Come
David Frum is all sunshine and rainbows:
1) Those in the Obama administration betting on a roaring Reagan-style recovery seem to be heading for a nasty surprise, economically and politically.
2) The horrifying unemployment numbers will not improve soon. Unemployment hit 9.8% in figures released Friday. Job-seekers are finding it takes more than 26 weeks to gain a new job, the worst number since record-keeping began in 1948. Unemployment among those 16-24 now exceeds 50%. And the number of those who have lacked work for more than six months has also hit a post-Second World War high.
3) With the private economy remaining so weak so long, U. S. tax collections will not improve any time soon meaning more terrible budget deficit numbers and more accumulated government debt.
4) The next U. S. “up” cycle will look very different from the growth cycles of the 1980s, 1990s, and 2000s. Taxes will be higher, to repay the big accumulated debts from this crisis. Young workers will begin their careers with a nasty scare and therefore probably much less optimistic expectations than previous generations. Look for more saving and less consumption.
5) Slow recovery for the economy means slow recovery for America’s troubled financial institutions. Government support for and control over banking will not end soon.
6) Those of us who criticized the Obama stimulus plan for stretching into 2010 may have to eat our words. Government looks likely to be the only source of increased economic demand for at least the next half year.
Politically, the months ahead will be unhappy times for incumbents. Look for Democrats to lose seats in Congress in 2010 and for President Obama’s poll numbers to decline further.
Economically, however, the impact will be even greater. The great era of private sector achievement and confidence that opened in 1983 abruptly ended in 2008. America has entered a very different era, in which government predominates and will continue to predominate for months and maybe years to come.
I have no idea if he's right. But if he is, does David really think the American public will be up for ten more years in Iraq and Afghanistan?