LAS VEGAS (CNN/Money) - Next year should be better for the overall economy, including the tech sector, but there still are plenty of factors that could slow or even derail the recovery.

That was one of the key themes of a Wednesday morning keynote speech by Carlos Bonilla, special assistant to the president and a member of the National Economic Council at Comdex.

Bonilla said that continued weakness in manufacturing is particularly worrisome. "This is a concern because manufacturing is a sector that will use a lot of the products that the tech industry provides," Bonilla said. He added that increasing consumer debt loads and declining household net worth is troubling as well.

However, Bonilla stopped short of declaring a double dip recession. He praised the recent 50 basis point rate cut by the Federal Reserve and said that this should help spur growth in 2003, citing current estimates by economists calling for a more than 3 percent increase in gross domestic product (GDP) next year. He added that the recent strength in the stock market, especially in technology stocks, is encouraging.

"We are seeing the end of the queasiness after the recession and after the bubble," he said. "There is room for optimism," Bonilla said.

But Bonilla, who sounded remarkably like Ben Stein (Bueller? Bueller? Do all economists drone like that?), cautioned the members of the audience not to make the same mistakes of the late 1990s and get overly excited when the recovery begins.

"There used to be a view that tech existed independent of the economy. Nothing could stop it," Bonilla said. Later on, during a question and answer session with the audience, he added, "Tech is part of this economy. You're not going to do much differently than the people you're selling to."

In addition, he argued that although growth for the tech sector should outpace that of the overall economy for the next few years, growth won't be as high as some expect simply because there still is a huge amount of excess capacity built up during the bubble that has to be weeded out of the market.

Bonilla kept his presentation relatively short, speaking for a little more than twenty minutes before opening the floor to questions from the audience.

Several people wanted to know if the U.S. will become the next Japan. Bonilla said that even though the prices of many tech products are coming down, that's because they are rapidly becoming commodities and is not a sign of an overall deflationary trend.

National Economic Council member Carlos Bonilla told Comdex that tech growth will return, but not to levels of the late 90's.

He added that Japan's biggest problem is that its banks still have bad loans from 10 years ago on their books and that the Japanese government has to continually focus its efforts on bailing out the financial institutions instead of spending on true growth engines of the economy.

Bonilla also talked about the lack of investor confidence. When asked about whether or not a change in the way dividends are taxed could help rejuvenate investor demand for tech stocks that don't pay dividends, Bonilla said there should be reform, calling the double taxation of dividends "nonsensical."

Currently, corporate profits are taxed when they are used to pay a dividend, and investors are taxed again on their dividend income. That's why it's known as double taxation. Investors have become more interested in dividend-paying stocks this year, but many large tech companies with ample cash loads such as Microsoft (MSFT: up $1.80 to $56.63, Research, Estimates), Dell (DELL: up $0.84 to $29.18, Research, Estimates) and Oracle (ORCL: up $0.23 to $10.60, Research, Estimates) don't pay dividends.

In fact, Cisco Systems (CSCO: up $0.80 to $14.46, Research, Estimates) CEO John Chambers told shareholders at its annual meeting Tuesday that it will consider paying a dividend only if the double taxation is eliminated. Bonilla said he is hopeful this policy eventually will be changed, but that he doesn't think it's likely to happen soon.

"Tax reform is a lot of heavy lifting that requires a full time commitment. It's not clear that the government is ready to undertake that," he said.