That’s a hard question to answer.

The uncertainty over Iraq has recently been cited for the malaise in the American economy and stock market. Once the conflict in Iraq ceased, the consensus was that there would be a marked improvement, similar to what happened after the Gulf War in 1991. (Gas prices went down, the economy began to improve and we were near the starting point of economic expansion.)

However, it doesn’t appear that the same pattern will reoccur. The war is technically over, and now some of the underlying economic fundamentals that were troubling us before the war are returning to the spotlight.

Companies are holding off expansion until they see a sustained demand for their products or services. That means cutting back on new plants, new equipment, new job creation. The U.S. Department of Labor recently announced that more than 500,000 jobs have been lost since the beginning of February, and the national unemployment rate has risen to 6 percent. This economic slowdown is putting the squeeze on consumer confidence, which affects consumers’ buying habits. Consumer spending drives the American economy and when consumers decrease their spending, the economy suffers.

The result is a difficult cycle to break out of as jobs are created as the economy expands.

So that all said, what would it take to help the economy? Probably the best answer is time and continued consumer spending.

One thing that’s certain is that there is no “magic bullet.”

-This Know It All was provided by Bill Nalepka, associate professor of accountancy and business at Adrian College.