Starr thinks the recession will hit its trough in the summer of this year, but unemployment will continue to grow into early 2010, eventually hitting 10 percent or above. Because the National Bureau of Economic Research, arbiter of when a recession begins and ends, says the downturn began in December 2007, this will be the longest post–World War II recession. “The good news is that Federal Reserve and fiscal policy will be on the case, working to generate that recovery.”
And deflation? Starr says it is mainly commodities deflation now (largely energy) “and will run its course in the next couple of months. A year from now we will be talking about moderate inflation of 1 to 3 percent.”
Everybody will be happy — just like those who are saved by Viagra.
Warning: Viagra doesn’t work every time.