First Trust ROI Podcast
ROI Podcast | Episode 21 | A Recession is Still Likely…But Here’s Why We Could Be Wrong | May 20, 2024
May 20, 2024
Brian Wesbury, an expert on the US economy, dives into the effects of government spending on growth and why a recession may still be on the horizon. He discusses the Federal Reserve's challenges with inflation and interest rates while reflecting on the disparity between government job growth and the private sector. Wesbury also shares an optimistic view on economic recovery linked to historical policy shifts and the enduring relevance of Milton Friedman’s insights. Additionally, he touches on the importance of Stoicism in navigating today's chaotic landscape.
39:25
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Quick takeaways
- Government spending tends to suppress long-term economic growth by redistributing resources without generating wealth or productivity.
- Emerging technologies like AI and healthcare innovations could enhance productivity, but their impact is uncertain amidst rising government intervention.
Deep dives
Economic Uncertainty and Predictive Challenges
The current economic climate is characterized by significant uncertainty, with predictions about a looming recession still undetermined. The recent unprecedented measures taken during the pandemic, such as extensive lockdowns and massive government borrowing, have left economists debating the potential outcomes. The reversal in market expectations, such as the shift from an anticipated six rate cuts to none or possibly one, highlights this unpredictability. This volatility demonstrates that traditional forecasting models may not apply, as the economic landscape has been altered by experiences that have never occurred before.
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