Manufacturers will resist recalls, and the FDA will be under increasing fire to revoke its 1ppm "safe level" announcement, replacing it with a decision based on science, not business interests.
Sub-prediction: Eventually, it will be discovered that the melamine contamination is caused by animal feed used at dairy farms. Although this discovery may not come until 2010 - 2012, it will result in calls for widespread changes in the feed practices of dairy farms. Sales of milk products will plummet temporarily, then recover steadily as American consumers forget about the scandal and keep chugging contaminated cow's milk.
Prediction #6 - At least three U.S. cities and states will announce their bankruptcy
Confidence in prediction: 90%
The U.S. financial crisis isn't just national, it's also local. (Or should I say loco?) Before the end of 2009, I predict at least three U.S. cities or states will declare bankruptcy (or the equivalent of bankruptcy).
California is already in a huge fiscal crisis, and several major U.S. cities have asked for bailout funds to continue their operations. The problem, you see, is that city and state governments all ramped up their spending in the midst of the lucrative housing bubble, during which record property taxes were flowing into their coffers.
And that brings me to the next prediction...
Prediction #7 - Taxes will be raised for virtually all Americans
2009 will see new taxes explode across America. Cities, states and the federal government will all initiate record tax increases in an effort to stave off financial collapse caused by excessive spending.
But rather than cutting the spending (because government hates to cut spending, since that means it would have to shrink), government authorities across the nation will resort to record tax increases in order to meet budgetary requirements.
All this brings up an interesting question: Why couldn't states just whip out a printing press and print their own money? Couldn't California declare a new currency called the "California Dollar" and simply print a hundred billion dollars and use that to finance its operations?
That would be stupid, of course. The currency would eventually be worthless and anyone investing in the currency would lose money. You might even call it counterfeiting, right?
And yet, think about it: That's exactly what the federal government is doing on a much larger scale, to the tune of over seven trillion dollars. It's the greatest counterfeiting scandal that's ever been witnessed in the history of money!
By 2012, if the United States government even exists by then, you can expect taxes to have risen so sharply that for many people it will no longer make sense to even hold a job. With government confiscating as much as 70% of your paycheck, what's the point of working at all? You might as well do nothing and collect welfare.