I am a CPA, Certified Business Advisor, and PFS (the American Institute of Certified Public Accountants highest certification as a Financial Planner), as well as holding a MS in Tax and undergraduate degrees in Economics and Accounting. I also have about 20 years experience helping business owners and families with money and Business decisions. The reason I bring these qualifications up is to offer up a stronger level of expertise than those who offer up the forecast presented.

There is no evidence today’s boomers, who were the Woodstock generation, will spend like their parents (the great depression generation) did. In fact, all evidence points to the opposite. This means in retirement they will spend, spend, spend. Sure, no general comment can apply to the whole, but from a statically perspective, the boomer generation spends like CRAZY and saves little. This bodes well for consumer spending as they age. 

There is significant evidence boomers will not “retire” as their parents did, they will live longer, work longer, and generate income longer. This will mean this generation will have money to spend, and being totally self reliant at age 65 is no longer as important as it once was. It is still desirable, but not as critical.

We do not have an energy crisis, we have an enemy crisis. We have the ability, in very short order, to generate twice the energy we currently do, and other countries are adding energy capacity at incredible rates. Oil is a commodity that runs about a 10 year cycle, in the 60’s it was cheep, 70’s it was super high (about as high as today when adjusted for inflation), in the 80’s mid priced, 90’s it was dirt cheep, and in the 2000’s it is super high again. There is a world of alternative energy sources coming to market, right now most are not cost effective, but when cost effective sources are found, the economies of scale will quickly be put in play in this sector, driving down cost. NanoSolar panels, geo-thermal, nuke power, and methane hydrate all offer very promising energy solutions. France builds and average of 1 reactor a year, Japan does the same, China is building several, only our own politics stops us from laying groundwork for several today. 

While energy is as costly as ever, we are using less and less each day. Better fuel economy, better insulation on homes, energy star compliant appliances, high efficiency windows, high sear rated heating units all push us towards less and less energy usage. The truth is the average family spends 1/3 less of its budget (on a percentage basis) on energy than it did in 1970, even with energy prices at all time highs.

The Mortgage “Crisis” is just another wave of the banking cycle that causes a banking “crisis” of some kind every 10 years. Look back at the 60’s, 70’s, 80’s, and 90’s and we see some form of banking crisis every decade. This is driven by the real estate bubble that occurs every 10 years or so. The bubble inflates, banks loan to much on real estate, the bubble corrects, and the bank crisis story starts all over. During the bubble the banks must engage in this game to stay afloat as margins are cut lower and lower causing them to do greater and greater volumes of real estate loans looking for fee income. Too many of them and it corrects. Housing is like all markets, it reacts to supply and demand, and at the peak of the real estate bubble there is excess supply being built up. Now we have to work off the excess supply. When that happens we will see the real estate market line out, then the banks will line out, and we will be on to the next crisis.

Global warming/cooling myths are being busted on almost a daily basis now. With the emergence of real scientist looking at this issue we find it is simply a normal cycle doing what cycles do, it is cycling.

Protectionism is being back. McCain has won the polls in the most recent Zogby polls against either Obama or Hillary. Even the news media is promoting NAFDA with some sibilance of honesty. Ross Perot was an idiot, the giant sucking sound was the wind around his ears, not jobs going to Mexico, as is evidenced by our 4.8% unemployment after 18 years of NAFDA.

As a tax researcher, I find it extremely unlikely the democrats will try to repeal the Bush tax cuts. During a primary they will energize the base by denouncing anything with the “Bush” name on it, but once the nomination is secured, they will moderate as they move to the middle to try and gain the popular vote.   Very few will vote for a candidate who will raise taxes, especially when everyone is calling for tax cuts to stimulate the collapsing real estate market.

The credit squeeze is real, very real, and in my not so humble pinion a good thing for America. America has a weak, poor, lower class of citizens who have simply refused to move up the economic ladder with the rest of America. They have been able to maintain increasing lifestyles using credit, and we are nearing the end of that cycle. This will cause either a radical decline in their standard of living, or their adoption of lifestyles which will generate income to support the lifestyle they desire. It is proven many times with this group that they will take the easiest road to get the lifestyle the desire. The credit crunch means that road is “GETTING A JOB”. Considering the massive shortage of workers and artificially low unemployment rate, this will help our economy.

Now the good news. The economy is strong, with 4.8% unemployment consumer spending will remain strong. We have issues, very real ones, but a correction in the market does not a ruined economy make. We will likely see a couple months of slow or negative growth, but a recession is a period of 2 consecutive quarters of negative GDP growth. Considering Q4 of 2007 saw growth, and with news the economy is picking up, and the stimulus checks starting in May, it is unlikely the first 2 quarters of 2008 will have negative growth. As such, we are not headed for recession.