Six Reasons a US Recession May Be Coming by 2023

Reasons why a US recession may be here soon 2022

The history of the economy, both in the world and in this country, is generally experiencing periodic occurrences, such as strong periods, recessions, and various intermediate situations, The last prolonged recession, in the United States, began to fade, during the first year of the Obama administration, in 2009. This is one of the longest periods in recent history without this economic downturn, but it is disconcerting to many that they do not know when to expect this change! Although President Donald Trump has overseen a good economy throughout his administration, he seems to want to take credit for all the previous positives while continuing to blame and complain about his predecessors! This President seems to be constantly focusing on the policies of his cabinet, refusing to take any responsibility for the less than desirable aspects! His strongest policy theme is the performance of the economy, which has not only remained strong during the past 30 months, but has become stronger in many respects! He seems to realize that any economic downturn, such as a recession, could hurt his re-election chances, so he attacks others, including the Federal Reserve, the Democrats, etc. While no one has a crystal ball and the ability to see into the future, a recent study shows that about three-quarters of economists predict a recession in 2020 or 2021. Mr. Trump seems to be hoping that he can postpone it beyond the presidential election. For various reasons, it seems likely that a recession in the US will occur sooner rather than later, and this article will attempt to consider, examine and briefly discuss 6 reasons why we believe this will happen.

1. It has been more than 10 years since the last recession:

Although no one wishes it, it has been more than 10 years since we have experienced a recession. Therefore, the nature of business cycles suggests that it is likely to happen, in the somewhat near future. Many believe that several of Trump's actions are akin to band-aids on a wound that only address the current appearance, rather than fully considering the future consequences!

2. Large Federal Deficits :

For a variety of reasons, but largely due to the 2017 tax reform as well as extensive foreign policy, the southern wall, and military spending, our national deficit is approaching record levels! A prolonged period of trillion dollar deficits is not only unhealthy and irresponsible, it is weakening our economy over the long term!

3. Tariffs and Trade Wars:

If the President relies on imposing tariffs, he will increase the cost of many items. A recent study shows that if all the proposed tariffs are implemented in both September and December, they will increase the cost of living for the average family by about $1,000!

4. World economy:

Regardless of what the politicians want, we live in a global society and the world economy has a significant impact on the American one! Isolationism, polarizing statements or trade wars will do far more harm than good!

5. Long-term low interest rates:

while lowering interest rates is an effective tool that the Federal Reserve uses to stimulate the economy, extending them over a longer period of time, as is the case now, has both positive and negative effects. The positives include: lower mortgage rates, cheaper money for businesses, lower borrowing costs, etc. However, the negatives include: once they are low, we lose the instrument for the future; they encourage more borrowing (which will have to be repaid in the long run and these rates may increase in the future).

6. Consumer confidence:

To avoid a serious recession, consumer confidence must be positive and motivating/inspiring! When Congress often seems unable to function effectively and the President articulates inconsistent, often contradictory messages, the public is often confused 

Don't bury your head in the sand, but realize that recession is a fact of life and you need to prepare for it! Are you willing to wake up and prepare for the future ?