A Clemson University professor says federal stimulus dollars are working to boost the economy in some areas, but they may not be working to help everyone.
In his quarterly report on the economy Dean Emeritus Bruce Yandle says the stimulus funding is working as politicians directed it to work. He says it has provided growth in the areas of employment for public school teachers, health care services and automotive production. He says the areas of retail, manufacturing and hospitality industries were not stimulated. He asserts that overall it has not had a major impact, except to avoid pain in certain economic sectors.
Yandle says the federal deficit caused in part by stimulus funding cannot be disregarded.
If we disregard it, the rest of the world won’t. We are on a path, which, if continued, we would end up in about 15 or 20 years with only four activities soaking up the entire federal budget. One would be interest on the debt. The others would be Medicare, Medicaid and Social Security. That would soak up every dollar.
Yandle says dealing with the recession will require some work.
That may involve changing some benefits. It may involve raising some taxes. But in the current period the high risk thing to do would be to place any burden on consumers, producers, manufacturers. Avoid new regulations, avoid new taxes, and give this engine an opportunity to run.
Yandle says the United Kingdom has in recent months implemented a cut to federal benefits to reduce its deficit.
Yandle says the country’s economic woes have been compounded by spending on two wars. He says the U.S. government has run a deficit during 36 of the last 40 years.
Yandle says it’s unlikely that we will see more stimulus dollars approved by the government U.S. government. He says observers have had close to two years to see how the plan worked. And he asserts that it has not had a major impact and that’s it’s unlikely that there will be additional stimulus dollars in future budget years. He says the 90 percent of Americans who are still working will drive a return to a sound economy, not more stimulus funds.
In his report, Yandle indicates that the Gross Domestic Product is growing and he says that’s good news. Yandle says manufacturing is leading recovery from the recession but at the moment manufacturing is stalled.