GARY SHILLING: Only One Thing Will Revive This Economy

Gary Shilling

Photo: Robert Libetti/ Business Insider

We recently reached out to our favourite economists and asked them: “What one thing would ignite this economy?”But bearish economist Gary Shilling wasn’t about to stray from his long-term thesis.

“The only thing that’s likely to revive the U.S. economy is time—the 5 to 7 years of it needed for deleveraging to be completed—especially in the global financial sector and among U.S. households,” he told us.

“Meanwhile, slow real growth of about 2 per cent per year and more frequent recessions are to be expected.  Ongoing economic weakness, despite massive monetary and fiscal stimuli, measures the huge power of private sector deleveraging.”

We also asked Shilling if he could use his imagination a bit and come up with pie-in-the-sky, silver bullet type of fix for the economy that policy makers could employ.

He wasn’t falling for that.

“There are no silver monetary or fiscal bullets to fix the economy, as witnessed by the tremendous efforts so far that have failed to restore meaningful growth,” he said.  “They are overwhelmed by deleveraging in the private sector.”

So there you have it.  See you in 5 to 7 years.

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