PHOENIX — After the Great Recession began in 2007, sending the nation into an economic spiral, Arizonans have been anxiously awaiting the day that the economy will crash again.
But according to one economist, that day might not come for a while.
Dennis Hoffman, professor of economics at the W.P. Carey School of Business at Arizona State University, said he does not think Arizona will have a similar recession anytime soon.
“We have very few places in the Arizona economy where we have excessively invested in one particular area and made it very fragile,” he said.
Economies crash when there are excesses, such as investors over-investing in particular areas or having excess spending, Hoffman explained.
“This over-speculation really is not a characteristic of today’s Arizona economy,” he said. “We actually benefit from the fact that oil prices are on the decline.”
In addition, Hoffman said, most Arizona businesses’s balance sheets are good, the employment picture is bright and people have more money to spend to help sustain the economy.
“If we want to worry, there’s always plenty of things to worry about,” he said. “I think that the nation today is less prepared today to absorb a major shock than, frankly, it even was back in 2008 and 2009.”
The political appetite for fiscal and monetary policy to come to the rescue is simply non-existent, he said.
“So should we absorb a major geo-political shock, be it dirty bomb or…an earthquake in California, that would be devastating,” he said, “Or some major calamity that would cause equities to spiral down, or cause people to lose their jobs en masse… I think that the nation is less poised to respond to that.”