Considered Opinion: Nobel Economists See U.S. Muddling Along Without a Slump Soon --- But the Group Notes Danger In Budget and Trade Gaps And Shaky S&L Finances --- Political Gridlock Is Forecast
Worrying about the financial markets, many analysts are convinced that the government must move soon to curb the federal budget deficit. But Paul A. Samuelson, a Nobel-laureate economist at the Massachusetts Institute of Technology, doesn't entirely agree:</br></br>"A failure to move quickly on the deficit doesn't necessarily mean a recession of the kind people like to write about. It's more like the radon problem in the basement of the new house I'm building. The clock is ticking all the time, but nothing big happens that you can suddenly write about in The Wall Street Journal."</br></br>Every year or so, this newspaper surveys a diverse group of eminent economists about the state of the economy. The panel comprises the 13 surviving American winners of the Nobel Prize in economics (Simon S. Kuznets, the 1971 winner, died in 1985). In the wake of the presidential election, what do the Nobelists, ranging from liberals to conservatives, think now?</br></br>None predict a recession right away. Robert M. Solow of MIT is the most specific, warning of a recession "sometime in 1989 or 1990." At the other extreme, Gerard Debreu of the University of California at Berkeley says, "The outlook depends heavily on political events and other unforeseeable developments. Anyone who tries to forecast has to use the word 'if' all the time, and I'd rather not try."</br></br>In the main, however, the panel sees the economy continuing to muddle along without needing any major government action. Nonetheless, the economists generally agree that the nation faces grave challenges, any of which could at some point trigger a slump. High on this list: