In looking at the financial news during the past few days, it is clear that the US continues to feel the effects of the 2008 financial crisis. The only bright spot is a reduced trade deficit and improved exports. However, this development is not enough to boost the economy much. Most people will not feel the effect.
I have mixed feelings about the economic prospects for 2011. While it is true that every business recession (or depression) comes to an end and recovery is imminent, there are few if any reliable ways to predict when the turnaround will happen given the severe damage caused by the 2008 financial crisis. I continue to believe that the vast majority of people in the US have little or no understanding of the implications from the disruptions that happened in 2008 and before.
From my viewpoint, 2011 could be a modest year in terms of economic growth. The lower value of the Dollar along with Quantitative Easing II might cause some new economic activity. However, the are aftershocks happening in public finance at the National, State, and local levels that might be a drag on the US economy for five years or more. Especially at the State and local level, this prospect is not publicized enough.
Perhaps the biggest concerns ... what will happen in China regarding inflation and growth, and what will happen in Europe regarding the sovereign debt crisis?
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