The other day while I was out for my 4-mile running trek, some northwest winds on the Great Plains made the jaunt much more difficult than I expected. The same can be said for the turnaround of the economy. Here are some headwinds that could make the earlier part of the next decade less than robust for the domestic and global economies.

FEDERAL DEBT

Current debt levels as a percent of GDP are historically high, with the exception of debt levels around World War II. Much of this debt has been accumulated with few results, such as infrastructure or long-term investment in the economy.

FOREIGN FINANCIALS

Nearly 40% of new U.S. debt is being financed by foreign countries, which is a larger percentage than previous times. In time, these countries financing the U.S. are going to require accountability in debt servicing and management. A result could be higher risk, which could result in higher interest rates.

TAXES

In my so-called “town-hall” conferences, which expose me to many corners of the planet, there is major concern about tax increases. These include the local, state/provincial, regional and federal levels of taxation. If one examines the Great Depression era, it is interesting that a tax increase contributed to a second economic downturn in the late 1930s just before World War II.

QUANTITATIVE EASING

Pick your poison: inflation or deflation. Government will err on the inflation side that requires printing money, which started intensely approximately a year ago. It will be surprising to see if inflation starts to rear its ugly head in 12-24 months.

CONSUMER SPENDING

The consumer accounts for 70% of the U.S. economy. Currently consumers are saving more and seeking lower-cost items, i.e., discounting. Spending patterns are changing and until they return, do not expect inflation.

STIMULUS

What happens when the U.S. and world governments take the training wheels off the economy? Stimulus packages have been coordinated around the world in major economies. The results have been more apparent in China and other emerging countries which represent 18% of the world economy than in the U.S. In North America, the stimulus boost has been less noticeable; however, it appears there is growth in the GDP and we'll be moving toward a positive number in the third and fourth quarters this year.

A major question that still has not been answered is: What are the new engines for economic growth when the economy turns around? Perhaps someone needs to let our leaders know that it may be agriculture. It produces something tangible that can be exported, and, if positioned correctly, creates employment. The industry is very broadin the production of food, fiber and fuel, products for the life sciences and life experiences.

NEW FEDERAL PROGRAMS

Finally, the wide range of government-sponsored programs, including cap and trade, health care reform and regulations on business and banking, have made many individuals uneasy. When people are concerned, confidence in investment spending and business direction becomes quite conservative.

Only time will tell whether these headwinds will create business conditions akin to a joyless, jobless recovery, or whether we reinvent ourselves and move on.

Dave Kohl, PhD., Corn & Soybean Digest trends editor, is professor emeritus at Virginia Tech. He's published four books and over 500 articles on financial and business topics. You can reach him at sullylab@vt.edu.