No matter what party controls the government this November the nation will enjoy prosperous business conditions until late 1954 when a mild recession may set in. University Professor Summer H. Slicter predicted those economic conditions at a meeting of the National Hardware Lumber Association on Wednesday.
The continued demand for consumers goods will force prices along in their present slow upward trend for at least another nine months, Slichter said. He added that there was almost no possibility of run-away inflation.
The present good business conditions will continue right up until 1954, the Business School economist feels. The reason for this is the fact that government defense spending will not reach its peak until "after the Congressional elections" in 1954.
After that date, Slichter feels, there is a good chance that over-production of civilian goods may cause a recession. But, he added, "one is justified in asserting that if a recession accompanies the slide-off in government spending, it will be a mild one."
The reason for the mild nature of the possible depression, he said, is because "the rate at which defense spending drops in pretty much within the control of the government and can be adjusted to changes in economic conditions."
Another means by which the recession might be absorbed, Slicter said, are the cuts in income taxes forseen by both General Eisenhower and Governor Stevenson. This increased consumer buying power, along with money from the large number of War Bonds which will mature in 1945 and 55, will serve to bid prices up and forstall a serious economic collapse.
The inflationary spiral may continue only until next summer, he predicted. At that time the total demand for goods may begin to level off.