Economist Martin Feldstein says the U.S. is at risk of a double dip recession.
“I think it’s a significant risk,” Feldstein says. “If you look at the most recent numbers, things are not so good.”
Manufacturing is down, Feldstein notes, are as both commercial and residential real estate construction, U.S. exports and state and local government spending.
“When you look ahead, the consumer is going to have a very hard time providing the kind of lift to aggregate demand that’s needed,” he told Bloomberg.
President Barack Obama, he says, spent so much of his time selling his administration’s healthcare plan to Congress that he’s ignored creating jobs, increasing aggregate demand, dealing with the fiscal deficits and the problem of our local banks and business credit.
“All of those things are major things which have basically been neglected while he focused on this health care legislation,” Feldstein says.
“It’s almost as if he didn’t know we had a deep recession.”
Even though its advocates claim Obamacare will pay for itself, Feldstein says it will undoubtedly force taxes much higher, creating even more economic stress.
Treasury Secretary Timothy Geithner said the U.S. economy is starting to expand after its worst slump since the Great Depression, Business Week reports.
“As the economy continues to grow, and as we continue to repair the damage, the economy will start creating jobs again,” Geithner said.
“One of the most important things the government can do to help us dig out of this mess is to promote a strong, dynamic private sector.”