Bloomberg News
CEA Chairman Christina Romer
September 1, 2010, 1:06 PM ET.
CEA Chairman Christina Romer
September 1, 2010, 1:06 PM ET.
By Jared Favole
U.S. Council of Economic Advisers Chairman Christina Romer, in her final speech before stepping down, called on the country to stomach new stimulus measures to lift the lackluster economy, even in the face of growing fears about the nation’s deficit.
“Concern about the deficit cannot be an excuse for leaving unemployed workers to suffer,” she will say at the National Press Club on Wednesday, according to a copy of her prepared remarks. She will add, “We have tools that would bring unemployment down without worsening our long-run fiscal outlook, if we can only find the will and the wisdom to use them.”
Her scheduled speech comes a day after President Barack Obama, in addressing the nation on the end of combat missions in Iraq, pledged a renewed focus to lift the economy. Obama has said his economic team, which includes Romer, is hunkered down trying to determine new measures to spur growth. It’s unclear what new ideas the administration is considering, but The Wall Street Journal reported the administration is considering tax cuts and a new nationwide infrastructure program.
Romer will defend the administration’s economic policies in the face of what she will characterize as an unprecedented, “terrifying” and “difficult-to-cure” recession. While other recessions, she will say, were caused by deliberate monetary policy actions this one began with low interest rates. She blamed the recession on a mix of regulatory failures, unsound practices and the mortgage crisis.
She said the administration had to act swiftly. “Had the Federal Reserve not responded as rapidly and creatively as it did, the crisis would have been catastrophic,” she will say.
Her speech is titled “Not My Father’s Recession: The Extraordinary Challenges and Policy Responses of the First Twenty Months of the Obama Administration.” She will say the recession destroyed $13 trillion of wealth in 2008.
Romer is leaving the administration this week to return to a teaching post at the University of California at Berkeley.
The administration, and particularly Romer, have come under fire for making what turned out to be rosy projections about the effect stimulus efforts would have on keeping down the unemployment rate. The unemployment rate now stands near 10%.
Republicans have latched onto some of the administration’s predictions and used them to argue that stimulus efforts have failed. The Congressional Budget Office, meanwhile, has said that the Obama administration’s recovery efforts increased employment by between 1.4 million and 3.3 million new jobs.
Romer will answer her critics. She will say the financial shocks the U.S. faced were so rare “there were no reliable estimates of the likely impact. To this day, economists don’t fully understand why firms cut production as much as they did, and why they cut labor so much more than they normally would, given the decline in output.”
Romer will say while real gross domestic product is growing, it isn’t doing so fast enough create the hundreds of thousands of jobs each month needed to return employment to its pre-crisis level.
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Source:
http://blogs.wsj.com/economics/2010/09/01/romer-calls-for-more-stimulus-in-final-speech/
.
U.S. Council of Economic Advisers Chairman Christina Romer, in her final speech before stepping down, called on the country to stomach new stimulus measures to lift the lackluster economy, even in the face of growing fears about the nation’s deficit.
“Concern about the deficit cannot be an excuse for leaving unemployed workers to suffer,” she will say at the National Press Club on Wednesday, according to a copy of her prepared remarks. She will add, “We have tools that would bring unemployment down without worsening our long-run fiscal outlook, if we can only find the will and the wisdom to use them.”
Her scheduled speech comes a day after President Barack Obama, in addressing the nation on the end of combat missions in Iraq, pledged a renewed focus to lift the economy. Obama has said his economic team, which includes Romer, is hunkered down trying to determine new measures to spur growth. It’s unclear what new ideas the administration is considering, but The Wall Street Journal reported the administration is considering tax cuts and a new nationwide infrastructure program.
Romer will defend the administration’s economic policies in the face of what she will characterize as an unprecedented, “terrifying” and “difficult-to-cure” recession. While other recessions, she will say, were caused by deliberate monetary policy actions this one began with low interest rates. She blamed the recession on a mix of regulatory failures, unsound practices and the mortgage crisis.
She said the administration had to act swiftly. “Had the Federal Reserve not responded as rapidly and creatively as it did, the crisis would have been catastrophic,” she will say.
Her speech is titled “Not My Father’s Recession: The Extraordinary Challenges and Policy Responses of the First Twenty Months of the Obama Administration.” She will say the recession destroyed $13 trillion of wealth in 2008.
Romer is leaving the administration this week to return to a teaching post at the University of California at Berkeley.
The administration, and particularly Romer, have come under fire for making what turned out to be rosy projections about the effect stimulus efforts would have on keeping down the unemployment rate. The unemployment rate now stands near 10%.
Republicans have latched onto some of the administration’s predictions and used them to argue that stimulus efforts have failed. The Congressional Budget Office, meanwhile, has said that the Obama administration’s recovery efforts increased employment by between 1.4 million and 3.3 million new jobs.
Romer will answer her critics. She will say the financial shocks the U.S. faced were so rare “there were no reliable estimates of the likely impact. To this day, economists don’t fully understand why firms cut production as much as they did, and why they cut labor so much more than they normally would, given the decline in output.”
Romer will say while real gross domestic product is growing, it isn’t doing so fast enough create the hundreds of thousands of jobs each month needed to return employment to its pre-crisis level.
.
.
Source:
http://blogs.wsj.com/economics/2010/09/01/romer-calls-for-more-stimulus-in-final-speech/
.
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