(Kitco News) - Analysts continue to forecast a U.S. recession, especially after the Atlanta Fed's GDP tracker predicted a 2.1 percent fall in second-quarter GDP. This number will be confirmed later this summer, but if it turns out that second-quarter GDP has indeed fallen, the U.S. could already be in a recession.
Mark Skousen, Editor-in-Chief of Forecasts & Strategies and Founder of FreedomFest, said that the U.S. economy will experience a "mild recession," and may be able to avoid a recession altogether.
"I think we're going to have a mild recession, and maybe not a recession at all," said Skousen. "Why? Because markets are responding to shortages. They are solving problems. Government creates problems, the market solves problems."
Skousen spoke with Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, at FreedomFest 2022 in Las Vegas.
Skousen, who correctly predicted the 1987 stock market crash, was "optimistic" about the U.S. economy.
"You have negative real interest rates right now," he said. "That's generally positive for the market… We're still under the Trump tax cuts. We now have a 21 percent tax rate on corporations. That's the lowest rate we've had in thirty years."
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Gross Domestic Product (GDP) is often used to measure economic activity, but it excludes the sale of intermediate goods and services. Skousen prefers to use Gross Output (GO), the sale of all goods and services.
According to the GO, the economy continues to grow, and there was no negative decline in GO in the first quarter of 2022.
"In fact, GO is up in real terms by 3.9 percent in the first quarter," Skousen explained.
Skousen predicted that the U.S. economy would be further bolstered by a Republican House and Senate victory in November.
"That will create gridlock," he said. "Joe Biden will have to deal with the Republicans. If we get through November without a tax increase, that means the Trump tax cut will continue to exist for another two years."
To find out Skousen's views on inflation and Fed policy, watch the above video.
Follow Michelle Makori on Twitter: @MichelleMakori
Follow Kitco News on Twitter: @KitcoNewsNOW
