The Congressional Budget Office (CBO) is being a buzz-kill.
The nonpartisan government agency that watches the cost of legislative action reported this week that if the President George W. Bush-era tax cuts are allowed to expire around the same time that automatic spending cuts in the federal budget are enacted in the first half of 2013, the U.S. could slip back into a recession. The CBO estimates that the U.S. economy could shrink by 1.3 percent in early 2013.
That's a pretty alarming warning, but who's really concerned about a potential crisis? We've got a presidential election under way.
The fear of economic contraction is real, but the roll that U.S. manufacturing has been on won't end soon. It may slow down, but this expansion is pretty special:
- It's taken place as consumer spending has yet to return to 2007-2008 levels.
- The residential housing market is still in a funk and hasn't done much to fuel the overall economic rebound.
- Some of the sectors that are in expansion mode in the U.S. show no signs of slowing down.
Related to that last point, just look at the oil and gas industry. It has helped to catapult North Dakota to the ranks as one of the largest oil producers in the U.S. In fact, it may reach a point in the near future where the state is producing more than 1 million barrels a day. Also, it's no surprise that the state has the lowest unemployment rate in the country at 3 percent.
The good news is that scenario might play out in other states as companies invest in shale gas extraction. In fact, PricewaterhouseCoopers (PwC) in a recent study suggested that the need for shale gas extraction equipment and pipelines could directly result in manufacturers employing more than 1 million additional workers by 2025.
And even if the energy industry doesn't develop to the full extent of PwC's prediction, growth will occur. It's just a matter of scale. As more of the world's population gains greater economic means, nations will crave more energy. The U.S., which has reduced its consumption of foreign-produced oil in recent years, actually might emerge as an energy exporter of natural gas.
Of course, that is just one sector of a very large economy, but other sectors hold just as much promise. Countries simply need metal-intensive equipment to help feed their burgeoning populations and construct modern cities that can accommodate this growth.
So as I look ahead to 2013, I'm still optimistic. What else would you expect from a Cubs fan? There's always next year.