Outlook for 2012: more of the same.

• Position: Economics

National and state economies will expand somewhat more in 2012, but not enough to make much of a dent in unemployment, thus leading to a continued historically weak recovery, according to economists at Indiana University, Bloomington, who expect the economy to expand by between 2.5% and three percent overall. Modestly rising output will lead to sluggish national employment growth of perhaps about 2,000,000 jobs, which would allow the unemployment rate to decline only slightly to about 8.4% by next December.

"The U.S. economy in 2011 has managed to underachieve even relative to our unambitious expectations,"' relates Bill Witte, associate professor emeritus of economics. "We see continuing tepid economic recovery during 2012, with disappointing output expansion, low inflation, and a small decline in unemployment. This is better than a slide back into recession, but is a long way from an optimistic outlook."

Witte attributes the nation's current economic malaise to two factors--the earthquake and tsunami that hit Japan in April and the failure of the national and international poIitical sectors to respond on major policy issues. The disruption to supply chains that the Japanese disaster produced had a temporary, but dearly negative, effect during the summer. The manmade component is the inability of the political sector--domestically and abroad--to face up to the necessity to make some tough derisions.

"At home, this has manifested itself as a series of deadline-driven crises that have all ended with a nondecision to delay any substantive action. The cumulative effect has been to ratchet up...