Joseph Stiglitz says the United States must keep priming the pump if it is to generate vital jobs.
US Economy May Shrink Again in 2010, Stiglitz Says
Singapore. Nobel Prize-winning economist Joseph Stiglitz warned there was a “significant” chance the US economy would contract in the second half of next year, and urged the government to prepare a second stimulus package to spur job creation.
“The likelihood of this slowdown is very, very high,” Stiglitz said in Singapore. “There is a significant chance that the number will be in the negative range.”
Stiglitz, a professor at Columbia University, called on Washington to make more funds available to states that face a drop in tax revenue. The United States must grow at least 3 percent to create enough jobs for new entrants into the labor force.
The unemployment rate fell to 10 percent in November from 10.2 percent in October.
“If you don’t prepare now, and the economy turns out to be as weak as I think it’s likely to be, then you’ll be in a very difficult position,” he said.
His views echo those of fellow laureate Paul Krugman and counter the Obama administration’s judgment that it is premature to consider another stimulus package after this year’s massive, $787 billion measure.
The worst US recession since the Great Depression has drained more than 7 million jobs in the past two years.
The economy grew at a 2.8 percent rate in July through September, after a record four straight quarters of contraction.
Associated Press, Bloomberg
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