Tags: stimulus

Obama Aide: Premature To Shrink Stimulus Programs

By Dan Weil   |   Thursday, 09 Jul 2009 08:24 AM

A White House aide said it’s too early for nations to curb their stimulus programs because the world economy remains in a precarious state.

“There is still uncertainty and risk in the system,” Mike Froman, deputy National Security Adviser, told reporters at a meeting of G-8 countries in Italy, Bloomberg reported.

At the meeting, G-8 countries agreed to disagree about how to handle stimulus at this point.

“Exit strategies will vary from country to country depending on domestic economic conditions and public finances,” leaders of the nations said in a draft communiqué.

In the U.S., Congress and the White House adopted a $787 billion stimulus package.

Meanwhile, the Federal Reserve pushed short-term interest rates down to nearly zero and is injecting trillions of dollars into the financial system.

Some experts say more stimulus is needed to boost the economy. But others say the stimulus should be withdrawn to prevent an outbreak of inflation.

While the uncertainty of global economic recovery remains an issue, “it’s also important to return to fiscal sustainability in the mid-term,” Froman said.

In the end, “every country will evaluate its own situation and its own capacity and need for action,” he said.

The growing debt burden in America makes more stimulus problematic.

“We are part of the global economy,” Martin Baily, a Brookings Institution economist, told The New York Times. “There are concerns … among those who have been buying our debts that we owe too much.”

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A White House aide said it’s too early for nations to curb their stimulus programs because the world economy remains in a precarious state.“There is still uncertainty and risk in the system,” Mike Froman, deputy National Security Adviser, told reporters at a meeting of G-8...
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2009-24-09
 

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