Post-Election: A Dark Future for the U.S.

danger cliffCan the U.S. avoid going over the fiscal cliff? Not a chance. That was the conclusion of J. Bradford DeLong, Professor of Economics at the University of California Berkeley and keynote speaker at this year’s Investment Innovation Conference, which kicked off Wednesday morning in San Diego, California. With the re-election of Barack Obama as U.S. president, there are few incentives for leaders of the right or left in Washington to step off their polarized platforms and work towards a solution. As a veteran economist and former advisor to the Clinton Administration, DeLong was pessimistic about the economic future of the U.S., concluding that what is now cyclical unemployment will ultimately turn into structural unemployment which will continue to drag on the U.S. economy for years to come. U.S. spending will continue to slow, with few solid drivers to encourage consumers to spend. QE 3 (aka QE Infinity) will only serve to exacerbate issues and make it a very difficult world for pension funds to invest in, DeLong concluded.