Credit: bejohngalt.com

If you think the U.S. economy is in bad shape, you haven’t seen anything yet, warns a leading research institute.

Worse yet, the forecaster says there's nothing Washington policymakers can do to head off recession, and all Florida lawmakers can do is chop another $2 billion from the state budget.

The Economic Cycle Research Institute predicts that the national unemployment rate, currently at 9.1 percent, will hit double-digits by next year and that the federal deficit, already above $1 trillion, will soar higher.

"It’s important to understand that recession doesn’t mean a bad economy -- we’ve had that for years now. It means an economy that keeps worsening, because it’s locked into a vicious cycle," the New York-based ECRI said.

"A new recession isn’t simply a statistical event. It’s a vicious cycle that, once started, must run its course. Under certain circumstances, a drop in sales, for instance, lowers production, which results in declining employment and income, which in turn weakens sales further, all the while spreading like wildfire from industry to industry, region to region, and indicator to indicator," the ECRI report stated.

“If the United States isn’t already in a recession now, it’s about to enter one,” said Lakshman Achuthan, the institute’s chief operations officer.

ECRI’s recession call isn’t based on just one or two financial barometers, but on dozens of specialized leading indexes, including the U.S. Long Leading Index, which was the first to turn down before the Arab Spring and Japanese earthquake, to be followed by downturns in the Weekly Leading Index and other shorter-leading indexes.

Using its multiple matrices, ECRI has correctly called three recessions without any false alarms in between. In contrast, most of those who have accurately predicted a recession or two have also been guilty of crying wolf -- in 2010, 2005, 2003, 1998, 1995 or 1987.

"More than three years ago, before the Lehman debacle, we were already warning of a longstanding pattern of slowing growth. At least since the 1970s, the pace of U.S. growth -- especially in GDP and jobs -- has been stair-stepping down in successive economic expansions," ECRI said.

"We expected this pattern to persist in the new economic expansion after the recession ended, and it certainly did.

"We also pointed out -- months before the recession ended -- that because the 'Great Moderation' of business cycles (from about 1985 to 2007) was now history, the resulting combination of higher cyclical volatility and lower trend growth would virtually dictate an era of more frequent recessions."

ECRI said it "comes as no surprise," with the latest expansion only a couple of years old, that the United States is again facing a new recession.

"Actually, such short expansions are hardly unheard of. From 1799 to 1929, nearly 90 percent of U.S. expansions lasted three years or less, as did two of the three expansions between 1970 and 1981," the report stated.

The ECRI forecast conflicts with the Blue Chip survey released on Friday. That consensus claimed the slowing economy is still growing modestly, and that it will continue to do so.

On average, the economists included in the tally foresaw a growth rate of 2 percent in 2012. In January, the consensus prediction for 2012 was a growth rate of 3.1 percent.

The New York Times noted that economists have been ratcheting down their projections.

Jan Hatzius and Dominic Wilson, two Goldman Sachs economists, predicted that France and Germany would soon fall into a “mild recession,” contributing to a slowdown in the United States, where they put the odds of a new recession at 40 percent.

In congressional testimony last week, Federal Reserve chairman Ben Bernanke lowered his own forecast and said the U.S. economy was “close to faltering." But he stopped short of predicting a recession.