No one can predict the future with absolute certainty but many make educated projections. 24/7 Wall St. has reviewed long-term economic forecasts issued by the government, financial analysts, and academics. While they are different and not all positive, we have identified nine critical economic measures that suggest the economy will significantly improve by 2020.
The White House and the Congressional Budget Office (CBO) issue various official projections for the state of the economy, federal spending, taxes and inflation over the next decade. The projections almost certainly have flaws, as most long-term forecasts do. For example, the outlooks for spending on the military and entitlement programs are too high. Alterations in the projections yield a picture of a U.S. economy that will be robust in 2020 in terms of employment, housing, real income, interest rates and the state of U.S. trade.
24/7 Wall St. has looked at these government projections, as well as those from several organizations that include economists and think tanks. For the most part, financial forecasts issued by independent groups are less affected by politics than those issued by the government. Their projections provide more realistic measurements of the impact of government spending on the overall economy over the next five years, and how this will affect the following five years after that. Their observations are based on a fundamental understanding that 1) entitlement programs will have to change considerably; 2) military spending will decrease out of economic necessity and a less aggressive U.S. role in foreign conflicts; 3) the longevity of many Americans will change spending habits; and 4) the federal government will most likely implement effective programs to aid the housing market. This housing aid probably will provide a primary foundation for a sharp recovery in the U.S. economy.
24/7 Wall St. looked at nine specific and critical measures of economic health and forecast how each would appear in 2020. These are housing prices, real income, inflation, military spending, entitlements, unemployment, taxes, interest rates and the state of the U.S. deficit and debt. These are our conclusions: