One of the few people who saw the US economic crisis coming, International Institute of Management President Med Yones, is now predicting that the economy will begin to recover in 2010.
The IIM is not a fan of expensive stimulus packages. It instead favors job creation through funding for small businesses, “The most cost effective and quickest method to stimulate the U.S. economy is to support job creation through US small businesses and innovation development. U.S. Census Bureau statistics show that 98 percent of all U.S. firms have less than 100 employees. These 27 million small businesses create over 85 percent of all new jobs and employ over 56 percent of all private sector workers. The main focus of development programs should be innovation development, export and employment support. This solution would be a much less burden on the taxpayers; it can be implemented without too much new legislation, and would have a much faster positive impact on the economy.”
They also argue for strict oversight of any recovery plan, oversight is critical to the success of the implementation of any stimulus program, “The effective and efficient program execution is necessary to avoid waste, fraud, and the abuse of loopholes to divert these funds to special interest programs. If the objective of President-elect Obama is to lead the economic recovery through the middle class, the job creation initiative through small business and innovation development, would be hitting 3 birds with one stone (sustainable job creation, middle class support, and increasing US businesses competitiveness through innovation development).”
Their prediction is that the economy will bottom out in 2009 and begin to recover in 2010, “The general economic decline cycle will bottom in 2009 and we could see stability sometime late 2009 or early 2010, then we will be back to modest recovery in late 2010 or early 2011. However, the real estate, construction and financial Industries will bottom in 2010; the recovery could start in 2011.”
2010 is the consensus for when the economy is expected to recover. The big question is what should the Obama administration do to help recovery along this year? Obama’s plan should be directed towards three areas, helping those who lost their jobs, dealing with the mortgage crisis, and long term economic development. T
he infrastructure projects are necessary, but the economy could be in recovery before these projects ever break ground. The focus of any package should be helping those who are hurting now. Government can’t solve the recession, but it can cushion the blow.