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Weekend edition January 17, 2025 | Tom Ballard

Matthew Harris addresses “U.S. and Tennessee Macroeconomic Outlook”

He spoke on Thursday morning to members of the Knoxville Chamber.

“All this happened before and all this will happen again,” Matthew Harris, the Boyd Distinguished Professor of Health Economics in the Boyd Center for Business and Economic Research at the University of Tennessee, Knoxville, said as he began a one-hour presentation to Knoxville Chamber members on Thursday morning.

It was the second year in a row where Harris combined humor with economic insights, but this time it occurred just days before there is a change of administrations in the Nation’s Capital which he said was accompanied by “a good deal of uncertainty.”

His presentation was titled the “U.S. and Tennessee Macroeconomic Outlook” and included a number of data-packed slides. Among the many points Harris made were these that we took note of:

  • U.S. gross domestic product growth has surpassed pre-pandemic levels as it continues to outperform other economies.
  • Deficits, which are at historic levels, are not always bad. Citing the pandemic and other economic challenges like the earlier housing crisis, the choice was the least favorable option which was inflation or a potential economic catastrophe.
  • The long-term gorilla in the room, however, is inflation. The goal of the Federal Reserve is about 2.0 percent. That said, Harris noted that the inflation rate in the U.S. is lower than our global peers.
  • Real net exports of goods and services has declined significantly.
  • Tennessee’s housing market is slowly returning to normal even as the cost of housing – owning or renting – is still what he characterized as a “pain point.”
  • Since March 2020, the Volunteer State’s employment number has grown by 190,000 jobs.
  • Eighty-four of Tennessee’s 95 counties have added population so far this decade, and the states most responsible for that growth are Florida (#1) and California (#2).

Harris noted that the top areas to target to reduce the deficit are defense, Medicaid, Medicare, and interest payments of the debit.

Related to two of the items that drive deficit spending, he asked and then answered this question: “What’s the most powerful lobbying organization in Washington? It’s the AARP (American Association of Retired Persons).” The implication was obvious: cutting healthcare will not be easy.



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