WORLD> Global General
|
WORLD> Global General
|
|
Related
Nations unveil stimulus measures to fight downturn
(Agencies)
Updated: 2009-02-03 15:25 The crisis, first sparked by so-called subprime loans in the United States to borrowers with spotty credit histories, has led to a credit crunch, with many banks unwilling or unable to engage in widescale lending. That has worsened conditions during the current global slowdown, and new US President Obama has repeatedly said the United States is facing its worst financial crisis since the Great Depression. But there has been heated debate about the ultimate effectiveness of government stimulus measures, and Republicans in the US Senate have vowed a tough fight this week for Obama's stimulus plan. They say the bill contains insufficient tax cuts, which they argue are needed to stimulate public demand, and fault much of its vast infrastructure spending, support for social programs and funding for state initiatives. But Obama, facing the first major legislative test of his fledgling presidency, said the time for action had come. "What we can't do is let very modest differences get in the way of the overall package moving forward quickly," he said. But Senate Republican minority leader Mitch McConnell said major changes were needed to the version passed by the House last week. "We need to make sure that we're not borrowing money to spend on projects that are not going to stimulate the economy," he said. The battle on Capitol Hill came amid more unhappy news about the health of the US economy. The Commerce Department said US consumer spending fell 1.0 percent in December from the previous month, while incomes dropped 0.2 percent. Macy's, a major US retailer, announced 7,000 job cuts as it streamlined operations to cope with a deepening recession that has dampened consumer spending. Governments across Europe meanwhile were looking at their own measures to turn around their flagging economies. Germany said it was considering nationalising some banks, while France unveiled new measures as part of a 26 billion euro ($33 billion) stimulus plan. But the mood remained downbeat. "I'd be extremely astonished if we have positive growth in 2009," French Finance Minister Christine Lagarde said. "Let's be realistic." The slowdown has hurt economies around the globe. China on Monday reported that around 20 million rural migrants were now out of work -- more than triple the number announced last month. But the managing director of the International Monetary Fund, Dominique Strauss-Kahn, said the outlook for Asian economies could turn around next year. "Once the world economy regains its footing a rapid recovery is possible," he said, predicting Asian economic growth of more than 5.0 percent in 2010, almost twice the pace expected in 2009.
|
