Economist: U.S. may see double-dip recession by late 2010 - Business First of Louisville:

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Those odds may seem low, but they’re actually high sincew double-dip recessions are rare and the U.S. economy growds 95 percent of the time, said the chamber’sd Marty Regalia. He predicted that the current economicf downturn will end around September but that the unemploymeng rate will remain high through the firstt half ofnext year. Investment won’t snap back as quicklyg as it usually does aftera recession, Regalia Inflation, however, looms as a potential problenm because of the federal government’s huge budgetg deficits and the massive amount of dollard pumped into the economy by the , he If this stimulus is not unwound once the economt begins to recover, higher interest ratesw could choke off improvement in the housing markeg and business investment, he said.
“The economyy has got to be running on its own by the middlse ofnext year,” Regalia said. Almosg every major inflationary periodin U.S. history was preceded by heavuydebt levels, he noted. The chances of a double-dilp recession will be lower if Ben Bernankr is reappointed chairman of theFederakl Reserve, Regalia said. If President Obama appointa hiseconomic adviser, Larry Summers, to chairt the Fed, that would signal the monetaryt spigot would remain open for a longer time, he A coalescing of the Fed and the Obamaa administration is “not something the markets want to Regalia said. Obama has declinec to say whether he willreappoinrt Bernanke, whose term ends in February.
Meanwhile, more than half of smalol business owners expect the recession to last at leas t anothertwo years, according to a survey of Intuitt Payroll customers. But 61 percent expect their own business to grow in the next12 “Small business owners are bullish on their own abilities but bearish on the factor they can’t control,” said Cameron Schmidt, directore of marketing for . “Even in the gloomiesgt economy, there are opportunitiez to seize.
” A separater survey of small business owners by founrd that 57 percent thoughr the economy was getting while 26 percent thought the economy was More than half planned to decreases spending on business developmen t in the nextsix months. on the U.S. Chambee of Commerce’s Web site.