Will Europe Cause a Double-Dip in the US?


We put the question to The Kudlow Caucus...Will the European debt crisis lead to a double-dip recession in the US?

Take our poll below and tell us what you think! Watch "The Kudlow Report" tonight at 7PM ET to find out what out caucus members have to say or check back here later for a summary from our caucus members.

The Kudlow Caucus Breakdown

Jerry BowyerChief Economist, Benchmark Financial Network
Greece is a nation in name only, with economic heft more like that of a large American county. It hasn't had a decent leader since Pericles and that was 2,500 years ago. If we get a second dip of recession, it will have come from DC, not Athens.

Kellyanne ConwayCEO and President
the polling company™
The initial contraction in the U.S. economy was triggered by real estate and we've absorbed most of it.

The European crisis should worry the U.S., but it is not yet significant enough for people in Europe to stop investing or consuming in the US.

David P. GoldmanSenior Editor
First Things
Yes - but European debt crisis is symptomatic of the problems that will lead to a double-dip recession, namely massive expansion of government deficits financed by the banks. Two-thirds of the U.S. deficit is financed on the balance sheets of banks; the same is true for Europe's PIIGS, except that their economies are much weaker than the U.S. economy. A chain (or a chain-letter) breaks at its weakest link. Keynesian deficit spending is like an amphetamine shot--short term benefits and long-term deterioration.

David GoodfriendLawyer
Economists such as Austan Goolsbee (Council of Economic Advisors) have said that unlike Asia, Europe's economic relationship to the U.S., projected growth, and other factors mean that we are less tied to their fate than some fear, and therefore less susceptible to a double-dip recession due to Europe's debt.

Jim LaCampPortfolio Manager, Portfolio Focus, RBC Wealth Management
Co-Host, Opening Bell Radio Show, Biz Radio Network
But the risk is there. This is 51/49 for me as I certainly would not be surprised. Housing is double dipping already. The recovery is feeble, but can still avoid a double dip, but not an inevitable morass.

Art LafferFmr. Reagan Economic Advisor
Chief Investment Officer, Laffer Investments
There will be European crisis and there will be a double-dip recession, but the first is not the cause of the latter.

Donald L. Luskin Chief Investment Officer, Trend Macrolytics LLC
No – but these things are always a question of definition. The Euro crisis will prolong the agony of the US economy that is no longer in recession, but not in expansion either. This a an “expansion-less recovery.”

Steve MooreSr. Economics Writer, The Wall Street Journal Editorial Board
Yes, starting in early 2011. The double whammy of a run on government bonds and higher tax rates spell recession.

Peter Navarro
Business Professor
University of California, Irvine
It’s the wrong question. The real question is whether it will lead to a significant slowdown in the U.S. economy and global economy…and the answer is yes. We have learned from this last decade that slow growth feels just like a recession.

James Pethokoukis
Money & Politics Columnist
But it sure doesn't help. Trouble over there can lead to a lower stock market -- as we saw today -- and tighter credit over here. So there is a reverse wealth effect at play. Exports are less of an issue. And let's hope markets don't notice Uncle Sam is about to spend $200 billion on a jobs bill that won't create any jobs.

Robert Reich
Former Labor Secretary
Professor of Public Policy, UC Berkeley
Thirty percent chance of a double-dip recession. Not because of Europe, though. Europe’s troubles are flooding the U.S. with global savings, keeping mortgage rates low. The Real problem is lack of consumer demand in the U.S.

Mark Walsh
Political Strategist and Campaign Innovator
No, since it (EEC) is a loose confederacy there will be more flexibility within nation’s and through some federated actions to blunt catastrophic impact internally, and hence externally. U.S. economy is showing strong internal growth signals not too intertwined with international trade (construction, etc.).