The Palmetto Insider

The blog of the South Carolina Policy Council

Economists Want Government to Back Off Now

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“Economists are getting more pessimistic about the strength of the U.S. recovery, but they don’t think policy makers should do anything more to support it”, according to this Wall Street Journal article and forecasting survey .

WSJ surveyed 53 economists, most of them working in private sector firms such as Nationwide, Standard and Poor’s, and MarcoEcon Global Advisors, and asked them a wide range of economic questions. Here are some of the conclusions:

  • Unemployment Rate – Unemployment will remain at around 9 percent nationwide until June 2011 and at 8.6 percent by the end of 2011. One economist from Goldman Sachs even predicts the unemployment rate will actually go up to 10 percent by the end of 2011. He says, “At that rate, job creation will barely keep up with new entrants to the labor force.” Sounds (much like) South Carolina’s current labor situation, where the private sector is actually shrinking.
  • Tax Cuts – Most economists agree the Bush-era tax cuts, which will expire by the end of the year, should be continued.  Seventy percent of economists think the administration should extend the tax cuts to all income levels.
  • Federal Stimulus Spending – But economists are not excited about the new $26 billion stimulus package. 63 percent say the economy doesn’t need any more fiscal or monetary stimulus/(manipulation). As one of the economists in the survey commented, “Business cycle correction needs time to work on its own.”

Written by Simon Wong

August 16, 2010 at 2:04 pm

Posted in Economics, Employment, Taxes

Tagged with ,

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