U.S. Overview: When Will Growth Resume?
Douglas Elmendorf admitted that even his predictions that unemployment will continue to rise, the economy will continue to contract until the second half of 2010, and growth for 2010-11 will reach 4 percent is considered optimistic in comparison to others′ views.
Panelists said the question is whether the $783 billion stimulus package will be enough to bring the country back to full output. Michael Boskin said the stimulus would best serve the economy through targeted efforts. Additional stimulus aid in 2010 should be viewed critically, and current allocations of the package should be analyzed for impact. It′s important to juxtapose long-run costs with short-term benefits, he said. Ultimately, the short-term effects of the stimulus are needed but the long-term impact of higher taxes will be felt by future generations if spending isn′t curbed.
Universal health care, carbon-emission caps and unionization all stirred debates on detrimental vs. beneficial effects. However, the panelists agreed that the crisis itself has exposed gaps in the current system of regulation. While the need for systematic risk regulation and market ratings were generally viewed as necessary, it is evident that regulation must be flexible enough to adapt to variety of industries and firm sizes that exist, they said.
Michael Miles said the nation survived the "perfect storm" and that things are "looking better," at least in retail. Though small businesses were hit the hardest during this crisis, these businesses will also lead the nation out of the downturn, he said.
Jim Goodnight said this is the ideal time for businesses, large or small, to look inward and begin to optimize their processes, minimize their inventories and truly maximize revenue. It′s through innovation, investment and cost-cutting that the nation can remain competitive on a global scale.