Longer-Term, Slower Economic Growth is the New Norm

As I've said lately, the last 30 years of the U.S. economy has been robust and booming. We don't really remember any really bad recessions after 1982 except for what we are going through now. \

Professor Adam Lerrick at Carnegie Mellon University believes that we won't be hitting another recession, but instead we will have a longer period of slower growth. I am not here to say he is right or wrong about another recession because from what I see (much slower growth and no more government stimulus) I think a recession may be in the works. 

What I will say is that he is right about longer term slower growth. Will we rebound eventually? Absolutely.  But I don't think the years of 8% GDP growth and 3.9% unemployment are going to be happening anytime soon for the length of times we had it before.  

If you read my previous blog posts, you will see that we had been spoiled in the last 30 years, and we thought money would be made for everyone and things would be rosey and wonderful. This just isn't realistic. This is exactly what causes all bubbles, and maybe our economy is just "bursting" from the 30-year bubble that was created starting in 1982 after a 15 year period of a less than stellar economy.  

Recession? Perhaps. Longer term slow growth: I would have to put a lot of money on that. This isn't a bad thing, remember. It just is. We have to deal with it, and we have to get savings back up and steady job growth going. And I do believe this can happen. China is growing like crazy, and pretty soon it won't be as cheap to make goods there and manufacturing jobs won't be leaving as much. Who knows? It might actually even come back.

Will it be in the millions? Highly doubtful, but it's still a start. The world economy growing will help the U.S. significantly, and developing countries are still doing well right now. Be patient. Buy good long-term assets at good prices (i.e. stocks, real estate, etc…) and you will be very happy you did 10-20 years from now.

Do you agree with this assessment? I'd like to hear from my readers on their thoughts. Please post in the comments section.