Rushville Republican

News

Discussion

Add a comment on this story
December 30, 2012

Economic outlook for 2013 uncertain

Debbie Blank Rushville Republican

RUSHVILLE — On the heels of Gov. Mitch Daniels’ Dec. 11 announcement that 2,552 jobs could be coming to Indiana, the Ball State University Center for Business and Economic Research director has a more sobering view of U.S. and Hoosier economies.

“A national recession remains highly likely this year,” Michael Hicks, Ph.D., told close to 90 people earlier this month at Hillcrest Golf and Country Club during his outlook hosted by Hillenbrand Inc. in conjunction with the BSU center.

A written handout emphasized, “Either the composition of the ‘fiscal cliff’ or a sustained European recession alone is significant enough to push our economy into recession.” The fiscal cliff refers to a combination of tax hikes and spending cuts that will be instituted Jan. 2.

The elimination of 2001-02 tax cuts will cause a higher increase of taxes on middle income households.

For instance, a $40,000 household will pay $900 more in taxes and a $70,000 household about $1,800. Families earning between $32,000-$47,000 will be paying taxes for the first time since 2003.

“This fiscal cliff is coming and I’m not sure kicking it down the road another year is going to make a difference. It’s going to be painful,” the Yorktown resident predicted. He pointed out, “Now is not a good time to be raising taxes” with so many unemployed.

History repeats itself, Hicks believed. “Every time Europe has been in a recession, we’ve been in a recession. Folks, Europe is in a recession with record high unemployment.” Greece, Portugal, Spain and possibly Italy are experiencing their highest numbers since 1933.

Because “my hunches are really bad,” the economist said his 2 percent growth outlook is derived from mathematical models used at Yale University and the University of Massachusetts and mirrors the number determined by Blue Chip Forecasters, a group of 80.

“That sounds kind of good, ... but it is not.” The U.S. economy used to grow at 3.4 percent. “If we grow at 2 percent, the economy will double every 40 years. That’s very, very slow growth.”

The Indianapolis Business Journal columnist noted, “We are very sadly expecting the national unemployment rate to remain roughly where it is at 7.8 percent. In order for it to drop, we need to create 150,000 jobs monthly. For us to have really dramatic economic growth,” like in 1982-83, 450,000 jobs would have to be added monthly.

Even though 146,000 jobs were created last month, 540,000 adults, ranging from retiring baby boomers to teens leaving for college, left the labor force. “That’s just an astonishing decline in economic activity. A shrinkage of the labor force means the overall economy is getting smaller.”

He blamed the jobless rate on what textbooks call structural unemployment and Hicks calls skills mismatch.

“What businesses want and what workers offer” in skills don’t coincide. When certain skills are no longer needed, people can’t find jobs.

According to the associate professor of economics, “I was an Army officer, great with maps and a compass. My children say, ‘I’ve got a GPS, why do I need that?’” The problem of skills mismatch could mean even slower economic growth, he warned.

 

Text Only
News
  • Fallen officers remembered

    Since 1962, America has celebrated National Law Enforcement Week to honor law enforcement officers who paid the ultimate price by giving their lives while serving their communities.

    May 20, 2013

  • Handbag auction raises thousands Handbag auction raises thousands

    The Rush Memorial Hospital Foundation recently had their annual handbag auction. This overwhelmingly successful event raised several thousands of dollars for the new pediatric building. Pictured in the center is auctioneer Rusty Harmeyer and guests.

    May 19, 2013 1 Photo

  • Safety blitz begins today

    Rush County Sheriff’s Department Chief Deputy Duane Raab recently announced that the RCSD and Rushville Police Department will kick off what has become an annual event known as “Operation Pull Over (OPO) today as a means to enforce Indiana seat belt laws.

    May 18, 2013

  • 1 Statue returns to Moscow Cemetery

    A historic landmark in Rush County is standing again, watching over the Moscow Cemetery after nearly two decades of being absent.

    May 18, 2013 5 Photos

  • Free Summer Lunch Program coming soon

    Summer is just around the corner! School will dismiss and for the next few months swimming and bike riding become the order of the day.

    May 17, 2013

  • Wells Fargo makes lead gift to RMH Pediatrics Wells Fargo makes lead gift to RMH Pediatrics

    On behalf of Wells Fargo Bank, Bruce Everhart, Marissa Taylor, and Theresa Alexander recently presented $5,000.00 towards the Rush Memorial Hospital Foundation Kedo’s Kids Campaign to Rush Memorial Hospital President and CEO Brad Smith and RMH Foundation Executive Director Faith Mock.

    May 17, 2013 1 Photo

  • Jury convicts burglar

    A Muncie man was recently sentenced following a jury trial in the Rush Circuit Court.

    May 17, 2013

  • Library annex razed Library annex razed

    City workers razed the former dental office and most recently the Rushville Library annex in the 300 block of North Morgan Street earlier this week.

    May 17, 2013 1 Photo

  • Rogers Student painter takes to the streets

    The cost of a college education is one of many aspects of a young adults life that comes with a price.

    May 16, 2013 1 Photo

  • RushShelby offices closed Friday

    RushShelby Energy has announced that their offices will be closed from 9 a.m. to 1 p.m. Friday, May 17 so the employees may attend the funeral of Dennis Rhoades, a 33 year employee of the cooperative. Emergency phones will be answered during the office closure.

    May 16, 2013