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October 13, 2011 11:20 pm
The US faces the possibility of fresh economic turmoil if politicians cannot agree on the $447bn jobs bill facing Congress, Barack Obama’s top economic adviser said on Thursday.
Speaking at the Financial Times conference focusing on the future of America, Gene Sperling said it was “inexcusable” for Washington not to act on 9.1 per cent unemployment because of partisan quarrelling. The jobs act is a “fundamental economic necessity”, the director of the US president’s National Economic Council said. “It is Washington’s responsibility to separate moments of political posturing and moments of economic imperative – with the current economic slowdown falling into the second category,” Mr Sperling said in his keynote address.
Jobs growth and the measures outlined in Mr Obama’s proposal will be the key to staying out of a double-dip recession, he said, adding that one-time stimulus efforts would not be enough to get the US back on the recovery track.
He said the administration was not looking at another tax holiday allowing companies to repatriate profits from abroad.
“Another one-time repatriation holiday will not have a discernible impact on job growth because it cannot reach the people and companies that need it.”
Other panellists throughout the conference also stressed the importance of putting partisan issues aside to deal with unemployment and recovery.
** Peter Orszag, the vice chairman of global banking at Citi and a former director of the Office of Management and Budget, said that inaccurate economic forecasts affected the nature of policy discussions and led to overly optimistic expectations of a rapid recovery.
Policymakers must unite to fund education and skills training to help eliminate the skills gap that is worsening employment and making the US less competitive with emerging markets, Mr Orszag said.
This inability to compete with countries such as China and India had not only affected the employment situation in the short term but would have lasting effects if not remedied.
“One of the biggest concerns is the mismatch of skills requirements and that the US is not providing enough Americans to fulfil the needed skills,” said Laura Tyson, former chairwoman of the president’s council of economic advisers.
** This article has been amended from the original to reflect a correction. Mr Orszag did not say, as previously reported: “These policy mistakes led to the current slow and weak recovery. The fact that everyone got the prediction wrong and that policy and decisions were made on the prediction has brought the US to the economic weakness of today.” We apologise for the error.
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