Europe Economy

Chance of a Double Dip Is 50%: Analyst

The odds of the U.S. economy slipping back into recession next year are 50/50 if the government doesn't introduce any fresh stimulus measures, Len Blum, managing director at Westwood Capital, told CNBC Wednesday.

US Economy Remains Fragile

"The only reason that the U.S. economy is doing as well as it is, is because of the government stimulus package," Blum said.

"Now, if the government doesn't introduce another stimulus package, this one will burn off in the first half and in the second half we could easily slip back into recession," he said.

- Watch the first part of the Len Blum interview above and click here to watch David Kotok join the discussion.

High unemployment and the reluctance of banks to lend are going to continue dragging on growth, he said. But coming up with another stimulus package won't be easy, Blum pointed out.

"The government is in massive, massive debt and at some point it is going to have to be paid back and if we don't pay it back, down the road there is going to be some real problems," he said.

There is even a risk of hyper-inflation because of the money-printing policies and the underlying strength of the economy is just not there, according to Blum.

"We're in real bad shape as an economy and our banks are holding assets at levels way over where they could sell them; so we've got Zombie banks that won't lend," he said.

David Kotok, chairman & CIO at Cumberland Advisors, thinks the economic outlook is more positive, however.

"I think we have a softer landing in the second half of next year, not a double dip into another recession… The Fed is not going to come off this very low interest rate policy, probably for the entire year," Kotok said.