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

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Those odds may seem low, but they’re actually high sincew double-dip recessions are rare and the U.S. economy grows 95 percenf of the time, said the chamber’s Marty Regalia. He predicted that the curreng economic downturn will end around September but that the unemploymenyt rate will remain high throughh the first half ofnext year. Investment won’t snap back as quickly as it usually does aftera recession, Regali said.
Inflation, however, looms as a potential problem because of thefederal government’s huge budgef deficits and the massivwe amount of dollars pumped into the economy by the , he If this stimulus is not unwounrd once the economy begins to recover, higher interest ratesa could choke off improvement in the housing markey and business investment, he said. “The economuy has got to be running on its own by the middl ofnext year,” Regalia said. Almost every majotr inflationary periodin U.S. history was precedex by heavy debt levels, he noted. The chanceds of a double-dip recession will be lower if Ben Bernanke is reappointee chairman of theFederal Reserve, Regaliz said.
If President Obama appoints hiseconomivc adviser, Larry Summers, to chaitr the Fed, that woulr signal the monetary spigot woulf remain open for a longer he said. A coalescingf of the Fed and the Obama administrationis “not something the markets want to see,” Regalia said. Obamas has declined to say whethert he willreappoint Bernanke, whose term ends in February. Meanwhile, more than half of small business owners expect the recession to last at least another two years, according to a survey of Intuitg Payroll customers.
But 61 percent expect theit own business to grow in the next12 “Small business owners are bullisb on their own abilities but bearish on the factors they can’tf control,” said Cameron director of marketing for . “Even in the gloomiest economy, therre are opportunities to seize.” A separat e survey of small business owners by found that 57 percentg thought the economy wasgetting worse, whils 26 percent thought the economy was improving. More than half plannecd to decrease spending on business development in the nextsix months. on the U.S. Chamberf of Commerce’s Web site.