Using words like "uncertain," "fragile" and "weak," 96 percent of top economics bloggers now share a gloomy outlook on the U.S. economy. According to the Kauffman Economic Outlook: A Quarterly Survey of Leading Economic Bloggers, Fourth Quarter 2011, respondents' expectations of higher annual deficits and top marginal tax rate increases, coupled with recession concerns, are a "depressing surprise."
For the final of 2011, the Kauffman Foundation sent invitations to more than 200 leading economics bloggers as identified in the Palgrave's econolog.net rankings. The Foundation surveys the bloggers each quarter about their views of the economy, entrepreneurship and innovation.
Top economics bloggers' preferred policy option to stimulate the economy (selected from a small set of options) is to "remove restrictions on who can be 'accredited' investors (allowed to invest in startups, recently raised to $1 million net worth by the Dodd-Frank Act)," with 80 percent support. More than 70 percent of the participants support the approval of the Keystone XL Pipeline, an idea to open up more domestic areas to oil and gas exploration and drilling.
Research highlights include:
- A two-thirds majority of respondents believe the government is too involved in the economy, despite the largely non-partisan identification of panel members.
- Only 2 percent of leading economics bloggers assessed the U.S. economy's overall condition as "strong and growing" – actually a slight improvement over last quarter, when no respondents gave this answer.
- The bloggers expect global output to rise faster than anything else. A significant difference from the previous reports is that only about 50 percent of respondents anticipate employment growth in the United States. Opinion remains split about expectations of higher poverty and inequality levels, with 5 percent believing that poverty is decreasing.
- When asked to consider the timeframe for the U.S. real estate market to stabilize and return to historically average home-price appreciation and foreclosure rates, only 4 percent believe the U.S. market will stabilize within twelve months while the vast majority sees a timeframe of four or more years.
- The concept of a gradual gas-tax increase for additional infrastructure spending was favored by 43 percent. Another 40 percent would increase the gas tax and put revenues toward reduction of the deficit or other taxes, while only 6 percent support an outright reduction of the gasoline tax.
The fourth Quarterly Outlook features questions from six economics bloggers on issues ranging from U.S. productivity growth to China's exchange rate. Respondents answered questions posed by Scott Sumner, TheMoney Illusion; Michael Mandel, Mandel on Innovation and Growth; Donald Marron, DMarron.com; Mark Perry, Carpe Diem; Bryan Caplan, EconLog; and Jeff Miller, A Dash of Insight.
Eight core questions and four topical questions were designed in coordination with a distinguished board of advisors, which includes:
Robert X. Cringely – I, Cringely
Laurie Harting – Palgrave's EconoLog
Paul Kedrosky – Infectious Greed
Lynne Kiesling – Knowledge Problem
Donald Marron – DMarron.com
Mark Perry – Carpe Diem
Wade Roush – Xconomy.com
Allison Schrager – Free Exchange
Nick Schulz – The Enterprise Blog
Yves Smith – Naked Capitalism
Alex Tabarrok – Marginal Revolution
Mark Thoma – Economist's View