Members of the Economic Roundtable Forecast determined Wednesday that this recession is not as bad as the last, but resulting inflation could prove more damaging in the long term.
The group of nearly 30 members has met annually for the last 15 years. It includes Ball State University faculty and local nonprofit and commercial business leaders.
"The Roundtable was designed to provide information on the local economy," associate director of economics Michael Hicks said. "Our goal is to convince the Federal Reserve to consider our assessments and statistical forecasts for its Beige Book, a publication of economic forecast which is updated every six weeks."
The Roundtable met Wednesday at the Innovation Connector, a business incubator which works with entrepreneurs to provide resources and connections for new and growing businesses. Brunch was provided by Ball State Dining.
Each year, the Roundtable recognizes one member with the closest projections for the coming year with a Golden Dart award. This year's recipient was Terry Matchett, who works at First Merchants Corporation. This is the second time she has received the award. Her 2009 projections had a 1.44 percent margin of error.
Professor emeritus Gary Santoni gave the award before offering an update of the U.S. economy. Citing statistics from the last two major recessions of the 1970s and 1980s, he said that the current inflation and negative growth of gross domestic product are not as bad as the former recessions.
"What is unusual is the Standard and Poor 500 expected earnings," Santoni said. "It doesn't look too bad. I mean, it doesn't look like we're going to hell in a handbag."
Hicks agreed that the economy is not in such bad shape, but the results of the economic stimulus may prove to be more harmful than good. He considers the stimulus package of $787 billion "unspendable."
"The government has asked for so much money that they will never be able to spend it, because all the funds that are raised will have to be matched," Hicks said.
Construction is a major factor in Indiana's economic stimulus package, and 25,000 construction workers are laid off, Hicks said.
"With these new construction jobs, we'll run out of workers before we run out of money," Hicks said. "Yes, it will stimulate the economy, but we have to ask, 'Will we be happy at the end of the day?'"
Another concern is the depreciating value of the American dollar due to the increase of money in circulation.
"Your financial assets will go down in value," Santoni said. "What [the government] gives to one person, it takes away from another."
The Roundtable hopes to report a better economic outlook at their next quarterly meeting, which will take place on May 13.
Innovation ConnectorWhat: Brilliant Brain Quest When: April 1
- Students are encouraged to enter contest.
- First place winner will receive $1,200 and 12 months of assistance, resources and space.
- Cash prizes will be awarded for first through fourth place.
- Visit innovationconnector.com for more information.
- Registration ends Friday.
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