High unemployment, deficits plague US in 'Obama 2.0' era
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NO QUICK FIX
Given the "severity of the problems, and the length of time over which they were built", there was "no quick fix" for the U.S. economic problems, Nobel laureate Joseph Stiglitz told Xinhua.
Like a sick people to recover from the illness, the U.S. economy also needed a long time to go around again, but this required policy makers' wisdom over the long haul, said Ou Minggang, director of the International Finance Department of the China Foreign Affairs University.
"I do think a strong second stimulus could move the United States from a high unemployment to somewhere lower. And if we spend on investment, in the way like China did in past years, it would provide room for longer economic growth," Stiglitz said.
However, due to the spiking deficits registered in the previous two fiscal years and possible stronger objection on spending issues from the Republicans during the coming two years, a large-scale fiscal stimulus program like the 787-billion-dollar one that Obama signed into law last year seemed a dream too luxurious to be true now.
The United States reported a 1.294 trillion-U.S.-dollar budget deficit in the just-completed fiscal year ending on Sept. 30. It is improving from 1.42 trillion dollars in the 2009 fiscal year, but still leaves this year's government deficit nearly three times as large as that in the 2008 fiscal year standing at 455 billion dollars.
Experts believed the high government deficit situation would continue for years, as the nation was still taking steps to shore up the economy and coping with adverse effects left over by the crisis.
Politically speaking, it was difficult to roll out a second-round fiscal stimulus package, and it seemed almost impossible under the current context. The most likely outcome would be a series of small measures, like infrastructure programs for highways. But they don't add to a second round of robust stimulus that we need, Stiglitz noted.
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