Wednesday, November 16, 2016

It's hard making predictions, especially....

Was reviewing my predictions from 3 years ago.  They've held up reasonably well, so here's a quick cut for January 2021.

1 The national debt will increase over the next 4 years back to close to $1T/annum.  Combination of two factors - Trump appears to be a supply-side Keynesian like W was, and I expect a recession during the next four years (business cycle) so expect some additional Keynesian spending at that point.  The term Suppy-side Keynesian was from the Atlantic describing W (he believed in both to stimulate the economy).
2. Official unemployment will start creeping up fairly soon....will break 7%.  More importantly, the Labor Participation rate will not break 64%.
3. Core inflation will average less than 4% per annum.
4. Top marginal federal tax rates will creep down a bot.
5. Gas prices on will not break $4 in LA metro.
6. There will be no major terrorist attack on U.S. soil. There will of course be San Bernardino shooters or Orlando shooters or.....
7. Trump will lose re-election.

The last one is based on recent presidents.  Clinton, W, and Obama were elected during a recession, and the country was recovering enough for them to earn re-election.  Bush 41 was elected somewhat near the end of an expansion, so the recession the year before the election cost him the election.  We all know that the business cycle exists & presidents gain too much credit/blame, but that does not change the reality of re-elections.

8.  Marijuana will continue to become legal in more states, eventually forcing the Feds to change marijuana from schedule I (may take longer than 4 years).  Hopefully down to Schedule IV.
9.  Drones will continue to be more in usage in other developed countries than the US.
10.  George RR Martin will never complete the Song of Fire and Ice series, so thanks to HBO for letting us know how it would have ended.
11.  I will still have to work for a living.

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