Tags: Stiglitz | stimulus | Recovery

Stiglitz: More Stimulus Needed to Revive Recovery

Friday, 13 Aug 2010 03:34 PM

Economist Joseph E. Stiglitz says a second round of stimulus is essential to economic recovery.

“It’s absolutely clear that you need a second round of stimulus,” Stiglitz told Bloomberg. “It needs to be better designed. It needs to be focused more on returns on investment, education, infrastructure, technology.”

“And if you do those kinds of high-powered investments, the long-term national debt will be actually lower and the growth in the future will be higher.”

The Obama administration, Stiglitz says, took “a big gamble and it doesn’t look like it’s paying off.”

“Unfortunately, with savings going up to 5, 6, 7 percent, aggregate demand is going to be weak,” he notes. “The only thing to fill it is government.”

Stiglitz adds that the recovery is not strong enough to generate new jobs for the new entrants in the labor force, “let alone to find jobs for the 15 million Americans who would like a job and can’t get one.”

David Rosenberg, chief economist and strategist at Gluskin Sheff, says a double-dip recession is still a possibility.

"The level of complacency over the economic outlook is palpable and so reminiscent of the fall of 2007 when everyone believed the Fed could navigate us into a soft landing in the face of a credit collapse," Rosenberg wrote in a note to investors.

"Many market commentators and prognosticators still see this cycle as a classic postwar correction in GDP than what it really is — the aftershocks of a postbubble credit collapse."


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Economist Joseph E. Stiglitz says a second round of stimulus is essential to economic recovery. It s absolutely clear that you need a second round of stimulus, Stiglitz told Bloomberg. It needs to be better designed. It needs to be focused more on returns on investment,...
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2010-34-13
Friday, 13 Aug 2010 03:34 PM
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