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O’Donnell feeling down about 2013 economy
Cindy Klepper - Monday, January 14, 2013 7:56 AM
Jim O'Donnell's feeling down.
"We are on a trajectory which is unsustainable as a nation," the former financial services executive told the crowd gathered at Huntington University on Wednesday, Jan. 9, for the 2013 version of his annual economic forecast.
O'Donnell, who spent the first part of his career working in the financial services industries in Boston and New York before joining the HU faculty in 1994, made no bones about his view on the future of the economy in the subtitle of his presentation: "The West's coming reckoning with uncontrollable debt and lack of will to reform."
While the 2012 economy wasn't all that bad - O'Donnell notes that stocks performed above average in 2012 - he says he sees reason to be concerned about 2013: shrinking earnings for United States corporations, a less effective stimulus and anemic growth.
And it's not just in the U.S., he says. The Eurozone nations, China and Japan all have economies that are stagnating, decelerating or already in recession.
Back home, O'Donnell says the gross federal debt as a percentage of gross domestic product (GDP) is on a "very alarming" increase; there's an "enormous gap" between government spending and government revenue.
The crisis point, he believes, is reached when the economy experiences an unexpected, persistent failure to grow and to employ all who want jobs.
"And we are there," O'Donnell says.
There's a solution, he says. That includes taming the unaffordable entitlement state by rebalancing welfare and growth and dispensing with temporary fixes. Those temporary fixes, he says, have a negative impact on businesses, who won't invest because they don't know what's coming next.
The solution won't be quick, he adds. It's taken 80 years to get to this point, and it will take at least 20 years to fix.
"We've been here before and I don't want us to lose heart," O'Donnell says.
British statesman Winston Churchill, he notes, had this to say about the American people: "You can always count on Americans to do the right thing - after they've tried everything else."
Along with faith in fellow Americans, O'Donnnell urges faith in God.
"We have not been abandoned," he says. "We will still be shown the way."