{"id":136561,"date":"2023-08-08T11:24:10","date_gmt":"2023-08-08T15:24:10","guid":{"rendered":"https:\/\/www.ucf.edu\/news\/?p=136561"},"modified":"2023-08-14T16:53:47","modified_gmt":"2023-08-14T20:53:47","slug":"ucf-economist-chatgpt-share-concerns-on-national-debt","status":"publish","type":"post","link":"https:\/\/www.ucf.edu\/news\/ucf-economist-chatgpt-share-concerns-on-national-debt\/","title":{"rendered":"UCF Economist, ChatGPT Share Concerns on National Debt"},"content":{"rendered":"

In his latest U.S. writeup, Sean Snaith<\/a> takes on ChatGPT’s economic forecasting prowess to discern whether a recession is coming and when the Federal Reserve will stop raising rates.<\/p>\n

The good news: Snaith, director of 166su\u2019s Institute for Economic Forecasting<\/a>, is likely to keep his job \u2014 for now. The bad: even AI is worried about the national debt.<\/p>\n

After last week’s downgrade of U.S. credit, the bots (and us humans) have reason for concern, Snaith says, pointing to his forecast prediction of a $40-trillion-plus national debt by 2026.<\/p>\n

“At some point, it’s going to catch up to us with potentially catastrophic results,” he says. “Government budget management has become a series of resolutions, stand-offs and spending without any real discussions about fiscal priorities or consequences.”<\/p>\n

Slower-than-projected economic growth, a recession and hiked interest rates would all push deficits even higher, says Snaith, whose predictions on these and more are available in his quarterly U.S. forecast out today<\/a> (complete with ChatGPT-composed song lyrics about inflation for the budding economist musicians out there).<\/p>\n

A Recession is ‘Definitely Maybe’ On Its Way<\/h1>\n

Last month’s better-than-expected gross domestic product report suggests the United States might escape a recession this year, Snaith says.<\/p>\n

Coupled with the strength of the labor market, what was once a near-certain downturn is now “definitely maybe,” Snaith forecasts in his report.<\/p>\n

“All indicators said the U.S. was headed into recession, but you’ve got a resistant labor market that doesn’t want to buckle under the weight of these higher interest rates \u2014 something that historically should have happened,” Snaith says.<\/p>\n

“Ultimately, it’s the labor market’s resiliency that is keeping any recession at arm’s length and stiff-arming it into the future.”<\/p>\n

Still, Snaith says economic woes from inflation will persist for some time, and he predicts consumer spending may give way to the erosion of real income in the second half of 2023.<\/p>\n

“Some of the recent slowdowns in inflation should provide a floor to keep consumers from falling too far, but the real damage has already been done,” Snaith says.<\/p>\n

Additional highlights from Snaith\u2019s four-year U.S. economic forecast include:<\/p>\n