The recession in the United States will stretch well into next year, probably raising the need for another fiscal stimulus package at least as large as the first one, prominent economist Martin Feldstein said on Tuesday.
Feldstein, a Harvard University professor who is a member of President Barack Obama's Economic Recovery Advisory Board, told Reuters that the stimulus would offset only a relatively small piece of the likely fall in spending, exports and construction.
"I'm afraid that the economy will continue to slide down well into next year," Feldstein, a former head of the National Bureau of Economic Research, said in an interview in Beijing where he was attending a conference.
"I don't know when it will end, but the forecasts that it'll end later this year I think are too optimistic," he said of the recession. ...
"The fiscal stimulus is just not large enough to offset the downward pressure that comes from reduced consumer spending. So unless somehow fixing the financial markets is enough to offset that, which I very much doubt, I think there will be a need for another fiscal stimulus package at some point," Feldstein said.
Wednesday, March 25, 2009
Feldstein: 2009 economic recovery "too optimistic"
Harvard economist, former Council of Economic Advisers chairman, and former National Bureau of Economic Research president Martin Feldstein thinks the recession will not end this year: