An interesting tidbit from Dr. Christina Romer’s testimony before the Joint Economic Committee. Citing economic analysts she says the fiscal stimulus will have its greatest impact on growth in the second and third quarters of 2009. (Editors note – those quarters are now behind us). By mid-2010, according to her testimony submitted to the committee, the “fiscal stimulus will likely be contributing little to growth.” What does that mean? Growth in the economy will be dependent on the private sector. And for those who think the recession is over – the Administration still predicts the unemployment rate won’t dip below 10% until the third quarter of 2010 – that’s next summer.
Given the precarious nature of the economy Romer added that now was not the time to raise taxes or cut government spending and inflation that is too low is a greater worry right now that inflation that is too high.
You can see her testimony HERE.
- George Stephanopoulos