Evercore Partners CEO and former Treasury official Roger Altman says the U.S. economy needs another round of stimulus.
A payroll tax cut, 100 percent capital expenditure write-off and emergency unemployment insurance "should be extended one last time because this fragile economy needs the boost," Altman writes in the Financial Times.
"Phasing out of the big 2009 stimulus now represents an economic drag equaling 2.5 per cent of GDP. That is too much but would be mitigated by this three-part, $200 billion infusion."
"Ideally, the budget negotiators would support these extensions now and send that positive signal, even though the three measures don’t expire until year-end."
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Altman points out that an already anemic economic recovery has recently slowed even further.
“The evidence is unmistakable, which is why share prices have fallen for six straight weeks,” he says, which also implies that the deficit negotiators should still press ahead to reach agreement and the effective date of their reductions should be 2013, not next year.
“The very latest data are clear,” says Altman. “Manufacturing growth has slowed, consumer confidence is retreating and home prices continue to fall," he said.
“Most importantly, labor markets are losing the limited momentum they had achieved.”
The big story of the U.S. economic “recovery” has been rapid industrial growth, at least according to the mainstream media, says Lee Adler, editor and publisher of the Wall Street Examiner.
“Unfortunately the story, which hasn’t been true for the past 10 months, is now beginning to fall apart,” Adler writes at the Business Insider.
“The problem here is momentum … When industrial production growth momentum breaks down, stock prices break with it.”
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