President Obama stands in the Rose Garden with his economic team before the Labor Day weekend. Photo Credit: White House.
There are a number of reasons to worry that the economy is headed for a new recession or at least a serious growth relapse. In response, the Obama administration and the Federal Reserve are putting forward additional measures to support the fledgling recovery. We asked seven leading economists what they would do if they were in charge of the Plan B for an Economic Recovery. This is what they said:
by Laura Tyson
"Over the next five years, the federal government should work with state and local governments and the private sector to invest $1 trillion in infrastructure."
by James K. Galbraith
"The clear and pressing priorities are energy and climate change. To address these challenges is a grand task. And it can provide millions of jobs, for many years."
by Joseph Gagnon
"Bernanke has expressed hope that the economy would return to a more satisfactory growth rate next year. The Fed’s economic objectives are too modest."
by Marshall Auerback
"When critics begin to talk about “wasteful” government spending, it is worth reminding them that there is no greater waste than persistent unemployment.It dwarfs all other inefficiencies."
by Michael Mandel
"I’m suggesting one part more money for R&D, one part better focus by President Obama, and one part an acknowledgement that the federal government may sometimes be making things more difficult for innovators and entrepreneurs."
by Robert Pollin
"The single most important reason for the failure of the recovery to take hold thus far is that private credit markets are locked up, especially for small businesses."
by Thomas Palley
"Escaping the Great Recession requires jump-starting the economy by increasing demand. That is why success needs the full policy package."