New US president faces toughest economic challenges in 75 years

Hardy has sketched out a number of scenarios for the 2009-2012 period - the whole of the next presidential term. On the economy, he says the best case scenario is one where the housing market bottoms out in 2009, foreclosures contract sharply and tax breaks and public works projects stimulate a recovery. Under the base case, house prices fall a further 20pc and bottom out in 2010, while the US goes into a steep recession and unemployment rises above 8pc by 2010, private consumption contracts sharply and the economy remains weak until 2012. In the worst case scenario, Hardy sees the US...