Indicators suggest that the U.S. economy is gaining momentum. In fact, it may be achieving escape velocity, the crucial point at which the recovery becomes self-sustaining. Consumers, businesses and financiers all appear more confident - they're purchasing goods and services, investing in plants and equipment, and providing financing to fuel the real side of the economy. However, many short-term risks remain: rising oil prices, weak job growth, a double dip in housing markets (with more homeowners underwater), state and local cutbacks, Europe's sovereign debt crisis, and constrained access to credit for small businesses. How quickly should the Fed exit its extraordinary programs? Is the Fed already behind on the inflation curve? How aggressively should we attack the federal deficit this year vs. the medium term? Do we have the will to address entitlement spending? Did financial reform legislation go too far? What might be the unintended consequences?
Executive Director, Economic Research, Milken Institute
Senior Fellow, Georgetown Public Policy Institute; former President, SEIU
Managing Director, Portfolio Manager, Lazard Asset Management LLC
Chairman, President and CEO, Allstate; Deputy Chairman, Federal Reserve Bank of Chicago