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Economics professor shares predictions at lecture
0928lecture
John Scott, associate professor of economics at North Georgia College and State University, gives a lecture Monday titled “The Economy in Perspective: Where are we now? Where have we been? Where are we going?” The lecture is part of a series Mondays at the Gainesville Civic Center.

Lecture series
When: 6:30-8:30 p.m. Mondays
Where: Gainesville Civic Center, 830 Green St. NE, Gainesville
How much: Free
Next topic: “Engaging Science Students K-12: Motivating Tomorrow’s Scientists” by chemistry professor Michael B. McGinnis

More info: The lecture also is presented 6:30-8:30 p.m. Wednesdays at the Hampton Park Library in Cumming and 6:30-8:30 p.m. Thursdays at North Georgia College & State University in Dahlonega.

The economy isn’t getting better any time soon, a North Georgia College & State University professor said Monday.
John Scott, also director of the Center for Economic Education at NGCSU, put the economy in perspective, explaining “where we are now, where we’ve been and where we’re going.”

“I expect a double dip,” Scott said, predicting another recession for the first or second quarter of 2011. “I expect the greatest inflation since the Civil War with all the money we have in the system. I also expect lower long-term growth, and I think our government’s reaction to the crisis will cause problems for years.”

Housing prices could keep dipping, and inflation will certainly skyrocket, he predicted.

“I wouldn’t be surprised if the prices double in the next four or five years, about 20 percent per year,” he said as several audience members mumbled in surprise. “You remember it got up to about 12 percent in the 1970s.”

So what is Scott’s solution? Leave the market alone and reduce government spending.

“What’s so crucial that we’ve done in the last two years that we can’t do without?” Scott said. “I’m one of the crazy guys who doesn’t see the need for so much government.”

By looking at the numbers — government spending, taxes, the federal deficit and unemployment numbers — Scott gave the background for how the economy got where it is today. In his lecture, he said programs such as Fannie Mae and Freddie Mac, which were created by the government to help citizens, spun out of control with lending to unqualified borrowers.

Then Scott showed a picture of Looney Tunes character Wile E. Coyote running off a cliff.

“Here we are. Fannie Mae, Freddie Mac and the Fed built the bomb, and the government wasn’t smart enough to defuse it, and we’re falling off the cliff,” he said. “We should have left it all alone. If you let people act in their own self-interest to pick up the pieces, they’ll cure their problems and the problems of the economy along with it.”

Instead of bailing out General Motors and Chrysler, the government should have let the market do its work, even if it was unpopular or scary at the time, he said.

Now high unemployment will continue, housing prices will stay low and the deficit will continue to increase, he said. The Medicaid/Medicare and Social Security questions will have to be solved, but most of all, the future is uncertain.

“There’s huge business uncertainty with health care costs next year and taxes next year,” Scott said. “New programs will affect everything, and even though some legislation has been passed, we don’t know what it’s going to do.”

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