With today’s news that the GOP is looking for a face-saving way to capitulate on the debt ceiling, the US is now *this close* to exiting the age of crisis.
There are still a couple of humps including, well, the actual debt ceiling vote itself, and the sequester (which is the introduction of premature austerity), and the potential government shutdown.
But the bigger picture is that the economy is healing, Europe is no longer in acute crisis, and China is rebounding.
There are still risks, but the era of crisis 2007-2012 is just about in the books.
Really driving things home is a new post from Bill McBride titled The Future’s So Bright…
McBride was the original crisis/economics blogger, and when he writes stuff like the following, you pay attention:
It looks like economic growth will pickup over the next few years. I’ve written about this before – a combination of growth in the key housing sector, a significant amount of household deleveraging behind us, the end of the drag from state and local government layoffs (four years of austerity nearing the end), some loosening of household credit, and the Fed staying accommodative (with a 7.8% unemployment rate and inflation below the Fed’s target, the Fed will remain accommodative).
Joe LaVorgna at Deutsche Bank made a similar call today, saying that finally the great deleveraging had come to an end.
Goldman has also said the crisis ends this year.
We don’t want to jinx things, so we’ll make the official call in a little bit, but we’re close.