News / USA

    US Economic Woes Debated

    Economic advisor Robert Reich, former Labor Secretary (File Photo - November 7, 2008)
    Economic advisor Robert Reich, former Labor Secretary (File Photo - November 7, 2008)
    Michael Bowman

    A recent rise in the U.S. unemployment rate has rekindled debate on America's slow-growth economy and what can be done to spark expansion and create badly-needed jobs.

    Historically, U.S. economic recoveries have gained momentum over time.  But a year and a half after emerging from the deepest recession of the post-World War II era, the U.S. economy is expanding, but only barely so. And even that anemic growth could be faltering.

    News that the nation’s unemployment rate shot up above nine percent last month intensified economists’ fears that tepid economic performance could persist for years to come.

    According to Robert Reich, who served as Labor Secretary during the Clinton administration, America’s lackluster economy is easy to explain.

    “The central problem is on the demand side. Seventy percent of the U.S. economy is consumers [consumer activity]. And consumers are hit with the equivalent of a truck," he said. "Housing prices are dropping like mad.  Wages adjusted for inflation are dropping.  Their jobs are disappearing. Under these circumstances, consumers are not spending.  And if they are not spending, then jobs are not going to be created.”

    Reich spoke on ABC’s This Week program. He advocated additional federal stimulus to spur economic activity.

    Republican Senator Richard Shelby of Alabama sharply disagreed.

    “Stimulus basically does not work. We have tried that," said Shelby. "I think what we have got to do is create the conditions [for economic growth]: tax reform, incentives for manufacturing. The market grows the economy. We have grown the government, but we have not grown the economy.”

    But former Labor Secretary Reich insisted that, when the private sector is lagging, the government should intervene.

    “When consumers and private investors are pulling in [withholding spending], then government has got to fill the gap," said Reich. " We have done this for the last 75 years.”

    Under President Barack Obama, an $800-billion federal stimulus package has been approved, income tax cuts have been extended, and the amount of money taken from workers’ paychecks to fund Social Security for retirees has been temporarily reduced. In addition, the U.S. central bank has kept interest rates at historically-low levels and sought ways to pump money into the ailing economy.

    Senator Shelby says there is only so much a heavily-indebted federal government can or should do, and that a new stimulus package, if proposed, would not pass Congress.

    “What we need to do is create some certainty, some conditions for people to invest, to grow [the economy], to have some confidence," he said. "There is not a lot of confidence in the economy right now.”

    President Obama has urged patience, arguing that the economy needs time to heal from a deep recession and the 2008 financial crisis. Republican presidential hopefuls vying to challenge Obama in next year’s election have been quick to proclaim that what is truly needed is new economic leadership.

    You May Like

    Russian-Backed Offensive in Syria Pushes War to Tipping Point

    As threat to Aleppo and rebel forces grows, US plan to negotiate becomes less and less appealing for Syrian government, says one military analyst

    IS Runs Timber Smuggling Business in Afghanistan, Officials Say

    Government turning blind eye to smuggling, according to tribal leaders; Afghanistan's forest cover dropped by 50 percent in three decades, experts say

    Video White House Seeks $1.8 Billion to Combat Zika

    Obama administration says funding would 'support essential strategies to combat the virus' such as rapidly expanding mosquito control programs, accelerating vaccine research

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    'No Means No' Program Targets Sexual Violence in Kenyai
    X
    February 08, 2016 4:30 PM
    The organizers of an initiative to reduce and stop rape in the informal settlements around Kenya's capital say their program is having marked success. Girls are taking self-defense classes while the boys are learning how to protect the girls and respect them. Lenny Ruvaga reports from Nairobi.
    Video

    Video 'No Means No' Program Targets Sexual Violence in Kenya

    The organizers of an initiative to reduce and stop rape in the informal settlements around Kenya's capital say their program is having marked success. Girls are taking self-defense classes while the boys are learning how to protect the girls and respect them. Lenny Ruvaga reports from Nairobi.
    Video

    Video New Hampshire Voters Are Independent, Mindful of History

    Once every four years, the northeastern state of New Hampshire becomes the center of the U.S. political universe with its first-in-the-nation presidential primary. What's unusual about New Hampshire is how seriously the voters take their role and the responsibility of being among the first to weigh in on the candidates.
    Video

    Video Chocolate Lovers Get a Sweet History Lesson

    Observed in many countries around the world, Valentine’s Day is sometimes celebrated with chocolate festivals. But at a festival near Washington, the visitors experience a bit more than a sugar rush. They go on a sweet journey through history. VOA’s June Soh takes us to the festival.
    Video

    Video 'Smart' Bandages Could Heal Wounds More Quickly

    Simple bandages are usually seen as the first line of attack in healing small to moderate wounds and burns. But scientists say new synthetic materials with embedded microsensors could turn bandages into a much more valuable tool for emergency physicians. VOA’s George Putic reports.
    Video

    Video Bhutanese Refugees in New Hampshire Closely Watching Primary Election

    They fled their country and lived in refugee camps in neighboring Nepal for decades before being resettled in the northeastern U.S. state of New Hampshire -- now the focus of the U.S. presidential contest. VOA correspondent Aru Pande spoke with members of the Bhutanese community, including new American citizens, about the campaign and the strong anti-immigrant rhetoric of some of the candidates.
    Video

    Video Researchers Use 3-D Printer to Produce Transplantable Body Parts

    Human organ transplants have become fairly common around the world in the past few decades. Researchers at various universities are coordinating their efforts to find solutions -- including teams at the University of Pennsylvania and Rice University in Houston that are experimenting with a 3-D printer -- to make blood vessels and other structures for implant. As VOA’s Greg Flakus reports from Houston, they are also using these artificial body parts to seek ways of defeating cancerous tumors.
    Video

    Video Helping the Blind 'See' Great Art

    There are 285 million blind and visually impaired people in the world who are unable to enjoy visual art at a museum. One New York photographer is trying to fix this situation by making tangible copies of the world’s masterpieces. VOA correspondent Victoria Kupchinetsky was there as visually impaired people got a feel for great art. Joy Wagner narrates her report.
    Video

    Video Sanders, Clinton Battle for Young Democratic Vote

    Despite a narrow loss to former Secretary of State Hillary Clinton in last week's Iowa Democratic caucuses, Vermont Senator Bernie Sanders secured more than 80 percent of the vote among those between the ages of 18 and 29. VOA correspondent Aru Pande talks to Democrats in New Hampshire about who they are leaning towards and why in this week's primary.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.
    Video

    Video Genius Lets World Share Its Knowledge

    Inspired by crowdsourcing companies like Wikipedia, Genius allows anyone to edit anything on the web, using its web annotation tool
    Video

    Video In Philippines, Mixed Feelings About Greater US Military Presence

    In the Philippines, some who will be directly affected by a recent Supreme Court decision clearing the way for more United States troop visits are having mixed reactions.  The increased rotations come at a time when the Philippines is trying to build up its military in the face of growing maritime assertiveness from China.  From Bahile, Palawan on the coast of the South China Sea, Simone Orendain has this story.
    Video

    Video Microcephaly's Connection to Zika: Guilty Until Proven Innocent

    The Zika virus rarely causes problems for the people who get it, but it seems to be having a devastating impact on babies whose mothers are infected with Zika. VOA's Carol Pearson has more.
    Video

    Video Stunning Artworks Attract Record Crowds, Thanks to Social Media

    A new exhibit at the oldest art museum in America is shattering attendance records. Thousands of visitors are lining up to see nine giant works of art that have gotten a much-deserved shot of viral marketing. The 150-year-old Smithsonian American Art Museum has never had a response quite like this. VOA's Julie Taboh reports.