Expert: U.S. headed toward recession
The U.S. economy as it stands right now, according to Dr. Memo Diriker is not in bad shape; however, he says the problem isn’t what is happening now.
Dr Diriker, director of the Business Economic and Community Outreach Network (“BEACON”) at Salisbury University, says this is the seventh year the U.S. has not had a recession.
According to the National Bureau of Economic Research, the average expansion cycle lasts less than five years.
“So theoretically, we are going to have one,” he says. “The question is, when is it going to be?”
Diriker tells 47ABC, he thinks a recession could happen within 18 to 24 months.
Recessions are marked by a number of indicators like higher unemployment rates, lower consumer confidence, and a gross domestic product that shrinks for two straight quarters.
“Regardless of how severe the next recession is and regardless of when it really comes, 18 or 24 months, it’s going to hurt a lot of people who don’t have savings built up or who haven’t reduced their debt, or who’s assets have actually shrunk,” explains Diriker.
Diriker also adds whether a democrat or republican wins the 2016 race to the white house, he or she needs to be prepared to face the real possibility of a recession.
Republican presidential candidate Donald Trump addressed a Pennsylvania crowd Tuesday, critiquing the U.S. of being too dependent on foreign countries.
“Ladies and gentlemen, it’s time to declare our economic independence once again,” says Trump.
Meanwhile, democratic presidential candidate Hillary Clinton addressed a Colorado crowd Tuesday offering one of her plans of helping students refinance their loans.
“We’re going to let young people who want to start something new defer your federal student loan payments for up to 3 years,” says Clinton.
According to Diriker, “The problem is, are those plans based on realistic assumptions or are they making a little optimistic assumptions? And right now early indications are that both parties are making assumptions that are not going to be sustainable in the long-run.”
Diriker says there are some things people can do to build their resilience to an impending recession, like curtail spending and paying off as much debt as possible. The catch is that if everyone were to do that at the same time, it could accelerate a recession.