Tax Cuts Brighten still-dim economic outlook

This week I read an article on tax cuts in relation to the economic outlook. The main points of the article are:

• Retailers are reporting a better than expected shopping holiday season. Manufacturers are seeing a pickup in production. And private sector job growth — though still very sluggish — has picked up from the first half of the year
• the outlook also brightened on the news earlier this month that Congress and the White House agreed to keep federal income taxes constant and cut payroll taxes.
• it all adds up to another year of relatively modest growth, not nearly enough to make much of a dent in the painfully high 9.8 percent unemployment rate.
• "The consensus of msnbc.com's Economic Roundtable calls for the gross domestic product to grow just 2.6 percent next year, even a bit slower than the estimated 2.8 percent growth seen in 2010. The unemployment rate is expected to drop only slightly to 9.2 percent by the end of next year, with the most optimistic of our dozen panelists calling for a drop to 8.5 percent."
• "A huge hangover from the housing bust is one of the major factors holding back the economy, with millions of homes still facing likely foreclosure. And high unemployment is holding down consumer spending and creating a cascade of unpleasant consequences, including huge budget shortfalls at every level of government."
• Inflation is also expected to remain low; the consensus estimate sees consumer prices, excluding food and energy, rising just 1 percent next year, about the same as 2010.
• "Despite a pickup in growth next year and in 2012, our forecasters expect the unemployment rate to remain stubbornly high for years to come. The consensus pegs the jobless rate at 9.2 percent by the end of next year and not falling back to pre-recession levels of 5 percent for five to seven years — or longer."

The economy is coming back from the biggest recession since WWII.Our economy is growing modestly. It is not growing enough to notice a major change. Forecasters predict that it will take several years, possibly over seven, before the jobless rate to fall back to pre-recession levels.

We are still facing hardships with our economy continuing to be in rough shape. It is unfortunate that it is not growing at a rate where people can appreciate it, and it make take several years to improve a significant amount. The good news is, it is improving. We are slowly but surely taking steps in the right direction.