Half a century ago, America suffered one of the most traumatic events in our history: The assassination of President Kennedy. But while it is important to remember that, it might also be good to consider that there is a bunch of good economic news today. Good news, especially for Michigan.
Yesterday, University of Michigan economists presented their annual November forecast. They saw good things ahead, with the national economy growing almost twice as fast over the next two years as now.
Two experts from the Research Seminar in Quantitative Economics predicted five million new jobs over the next two years. Unemployment, they predict, will fall from just over seven to about six percent.
Meanwhile, they predict the automakers will sell half a million more units next year than this, more still in 2015, and the housing market will also grow. Inflation will stay low and oil prices will remain steady. This is all very good news, if true.
But there is more. The federal government said it would sell off the last of its shares in General Motors by the end of this year, putting an end to the era of “Government Motors.” That gets Washington out of the car business earlier than planned.
Now, you’ll hear analysts saying that the taxpayers will have lost $10 billion when all this is finally over. That is technically true, but is also terribly misleading. It’s like saying I lost $30 because I had the oil changed on my car, instead of waiting for the engine to explode.
Economists at the Center for Automotive Research have told me that without the bailout, America might have lost three million jobs, and would have been plunged into a new Great Depression. Today, GM is making billions, although with far fewer workers than it once had.
There is another bit of good news. The number of homeless people has fallen dramatically in the United States and even more so in Michigan. According to the U.S. Department of Housing and Urban Development, the number of homeless statewide last January was almost 12 percent less than three years ago.
There were far more dramatic drops in the number of homeless veterans and those chronically homeless, which is very encouraging. But the number of homeless barely budged in Detroit.
And there is a fairly large cloud threatening both the homeless situation and our overall economic growth. And that’s the budget sequestration, the mandatory cuts that keep kicking in because our divided Congress couldn’t agree on a federal budget.
On New Year’s Day, just as temperatures reach their coldest, a five percent cut to emergency housing and shelter programs is scheduled to go into effect. That will be devastating. Other sequestration cuts threaten other parts of our recovery.
And another University of Michigan survey shows consumers have little faith in Washington and its economic policies, which has caused a pessimism that is also inhibiting growth.
The last thing America needs now is ideologically driven policies that hurt the recovery. If Congress can’t lead on this, they at least should have the sense to suspend the sequester and get the heck out of the way.
Jack Lessenberry is Michigan Radio’s political analyst. Views expressed in the essays by Lessenberry are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.