Don't Believe the V-shaped Recovery Hype! Economist Behravesh Says

To hear money managers like Peter Schiff and Marc Faber talk, it's all gloom and doom (capitalism is dying) or a rocket ride to a V-shapred recovery (think bear-turned-bull Jim Grant.)

Forget the hype on both ends of the spectrum, says our guest Nariman Behravesh, chief economist at IHS Global Insight. "We are in a recovery," Behravesh says. "But in the early stages, it's going to be a very modest recovery, very slow growth."

Behravesh sees U.S. unemployment eventually surpassing 10 percent, consumer spending scaled back, and more paying-down of debt -- all economic headwinds. A slow economic recovery eventually will gain steam, but don't expect 3 percent to 4 percent growth until the end of 2010 -- at the earliest, Behravesh said.

What really worries the economist? America's mountain of debt, and we’re talking well beyond the short-term stimulus spending. Rising Medicaid and Medicare costs loom large over the U.S. economy. "We have to deal with those to get our debt under control," he says