Miami Real Estate news

Europe’s debt crisis and the political logjam in Washington are creating uncertainties that will continue to weigh on the economy this year, a panel of two economists and a former U.S. senator said in Fort Lauderdale on Wednesday.

While Americans are suffering from the fatigue of lingering economic ills in the U.S. – including a troubled housing market – economists Mark Vitner and Sean Snaith warned of underestimating the dangers of Europe’s financial crisis.

“Sometimes you have to amputate an extremity to save the rest of the body and I can see that as a likely outcome for the Euro,” Snaith, director of the Institute for Economic competition at the University of Central Florida .. , said at the breakfast event held by NAIOP, the National Association of Industrial and Office Properties .. .

The single currency in Europe can’t persist with one central bank and varying fiscal policies in each nation, Snaith said. The hope is the Euro zone can avoid a complete collapse that would devastate the global economy.

Vitner, managing director and senior economist for Wells Fargo .. in Charlotte, said there hasn’t been an inch of progress in solving the European financial crisis, and he’s sure Greece will default.

That will lead to a crisis in Italy, which has the third-largest sovereign debt globally after the United States and Japan, he said.

“They have been rolling over their debt since Julius Caesar,” he quipped.

A crisis in Italy could bring down the European banking system, which he described as a potentially catastrophic event.

Optimists who expected the recessionary carnage to be limited to southern Europe are already wrong because Germany, France and the United Kingdom all declined when it came to gross domestic product in the fourth quarter, he said.

By June, there could be another round of worries about a double-dip recession in the United States, he said.

The third panelist, George LeMieux, the chairman of the law firm Gunster Yoakley & Stewart PA .. , offered the perspective of having served as an appointed U.S. Senator, a position the Republican is now seeking to recapture by election.

The U.S. debt has ballooned from $11.7 trillion when he entered the Senate in September 2009 to $15 trillion now, he said. If we don’t deal with the mountain of debt, we’ll eventually be talking about our crisis and not Europe’s.

The panelists talked about the economic uncertainty in Washington and regulatory issues, such as health care reform and financial system regulation, that make business decisions difficult.

LeMieux, who demurred on divulging his favorite GOP presidential candidate, was hopeful that the political logjam could be broken even if Obama is re-elected – pointing to Bill Clinton’s second term with a Congress dominated by Republicans.

The lingering housing crisis also was another big topic.

Snaith said his rough calculations show an average family earning $69,000 and saving about 9 percent a year, would take 18 years to recapture the value lost in declining home values.

LeMieux was critical of the slow pace of the foreclosure process in Florida, saying it takes about 800 days to go through an average foreclosure, which is 260 percent more than the national average.

Vitner mentioned ongoing negotiations between the nation’s 50 state attorneys general and the five largest mortgage servicers over a new lending program to help underwater homebuyers. Until that’s worked out, the pace of foreclosures in states like Florida will continue to be an issue, he said.

Vitner was concerned that it took about 12 years for Florida to fully recovery from the 1974-75 recession and worries that we lack some of the economic engines during that recovery, such as creation of Walt Disney World .. , construction work on I-75 and I-95, and the space program. Looking for positives, Vitner said international trade, bio science and medicine look promising.

Net migration into Florida has picked up, and housing prices may look cheap to retirees, he said.

LeMieux also talked about a wave of 70 million retirees, an apparent reference to Baby Boomers, and said the state will pass New York state in population in two years. Florida’s low tax rates, balanced budget and right to work status should help the economy, he said.

The election should answer some questions about the uncertainty in Washington, Snaith said. Meanwhile, expect to limp along with a subpar recovery.