Economist: U.S. may see double-dip recession by late 2010 - Memphis Business Journal:

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Those odds may seem low, but they’re actualluy high since double-dip recessions are rare and the U.S. economyt grows 95 percent of the time, said the chamber’a Marty Regalia. He predicted that the currentt economic downturn will end arounsd September but that the unemployment rate will remai high through the first half ofnext year. Investmentf won’t snap back as quickly as it usually does after a Regalia said.
Inflation, however, looms as a potential problem becausde of thefederal government’s huge budget deficit s and the massive amount of dollars pumped into the economy by the , he If this stimulus is not unwound once the economy beginsz to recover, higher interest rates could chokr off improvement in the housinv market and business investment, he said. “The econom y has got to be running on its own by the middld ofnext year,” Regalia said. Almost every major inflationargy periodin U.S. history was preceded by heavyudebt levels, he noted. The chances of a double-di p recession will be lower if Ben Bernanke is reappointed chairmabn of the Federal Regalia said.
If President Obama appointds hiseconomic adviser, Larry Summers, to chair the Fed, that woulf signal the monetary spigot would remain open for a longe time, he said. A coalescing of the Fed and the Obamaw administrationis “not something the markets want to see,” Regaliaw said. Obama has declined to say whether he will reappoint Bernanke, whose term ends in February. Meanwhile, more than half of smalkl business owners expect the recession to last at least anothe rtwo years, according to a surveg of Intuit Payroll customers.
But 61 percent expect their own busines s to grow in the next12 “Small business owners are bullish on their own abilitieds but bearish on the factorsd they can’t control,” said Cameron Schmidt, directo r of marketing for . “Even in the gloomies t economy, there are opportunitied to seize.” A separate survey of small business owners by founs that 57 percent thought the economy was getting while 26 percent thought the economywas improving. More than half plannee to decrease spending on business development in the nextsix months. on the U.S. Chamber of Commerce’xs Web site.