The U.S. economy should do relatively well until about 2026, according to at least one expert.
Alan Beaulieu, president of ITR Economics, was one of the speakers during the Land Investment Expo held in Des Moines Jan. 11. Right now, he said, the U.S. Gross Domestic Product (GDP) is going up, and it looks like it will continue to do so for the foreseeable future. The big reason for that is government spending that was aimed at pulling the economy out of the COVID pandemic slump.
“The government has been spending money like there is no tomorrow,” Beaulieu said, adding that the spending has been by both Democrats and Republicans in Washington, D.C.
And he also said neither party can claim to be better for the economy. Over time, there has been little real difference in how the economy has performed under Democratic or Republican leadership.
There are, however, several trends worth watching.
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Beaulieu said one thing that has been important in recent months due to COVID and the recovery is that consumers are buying things. During the past two years and through this winter, many consumers have not been spending their money on travel, restaurants or entertainment, so they have been buying things. That has been a reason both for labor shortages and the backlog of consumer goods.
The U.S., he added, is still the second-largest manufacturer and the second largest exporter in the world.
People are also buying land. Farmland prices have been going up for the last year, and that will likely continue for at least a few years, Beaulieu said. The rate of increase in land prices will likely slow from last year’s very large jump, but prices likely won’t actually go down over the next several years.
“It’s good to be you,” he told the group of landowners in the crowd. “You’re in the right place.”
He said there could be a temporary economic dip sometime in 2023, but he expects a serious recession in about 2026 as long-term economic factors come to a head. Of course, there are always other events that could change long-term economic forecasts, just as the COVID pandemic changed things dramatically. One example would be if a major war were to break out, such as one between the United States and China.
“That’s not so far-fetched,” he said, explaining that China appears to be retreating back into more communism and less capitalism.
President Biden has stood up to China, he said, but there is going to be some friction in that relationship.