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Good news and bad news at economic forecast

Published Thursday, February 02, 2012 9:54 AM

By Frank Johnson
The Gazette

Photo Provided

South Carolina’s Lowcountry is leading the way in an economic recovery, and the future looks bright.

That’s the good news.

The bad news is, higher taxes or steep budget cuts may be unavoidable to fix state and federal governments that have grown out of whack over the decades.

The Berkeley Chamber of Commerce’s 2012 Economic Forecast Luncheon was both uplifting and sobering. The event took place Jan. 20 at Trident Technical College’s North Charleston campus, and drew community leaders and chamber members from across Berkeley County.

Two experts took the podium to share their economic insight: Bruce Yandle, a distinguished professor and Dean Emeritus at Clemson University, and Mike Shealy of the South Carolina Finance Committee.

Yandle’s presentation was filled with optimism for the Lowcountry, the state and indeed the country.

“Things are really getting better,” he said. “Retail sales … have fully recovered (to pre-recession levels). Industrial production will have fully recovered by 2013.

“You are sitting in the strongest part of South Carolina. This is the golden territory for our state right now.”

The Lowcountry’s unemployment rate (7.8 percent) is lower than the state and nation’s, he reported.

Although the housing market remains sluggish, Yandle predicted that South Carolina as a whole “will fully recover” from the recession by 2015 at best, or 2017 at worst.

The United States, he reminded his audience, still has the world’s largest economy by far.

With a focus on government budgets, Shealy’s message stood in contrast to his counterpart’s.

On the state level, he said, income growth does not equal the general fund revenue growth in the budget, which has led to state agency budgets being slashed in recent years. “If this continues, it will be difficult to keep doing the things the (state does now),” he said.

Shealy pointed to education as one area that always gets cut first in lean times. That attitude must change, he said. “We must start treating education not as a social issue, but as an economic one,” he said.

Shealy said “drastic changes” are unavoidable on the federal level, with such action as federal cuts in Medicaid a real possibility.

Americans have “gotten more government than we’ve paid for,” he said, and added that budget cuts or tax increases will eventually be the only two options to correct the situation.

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