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ECONOMIC SNAPSHOT FOR DECEMBER 2010

ECONOMIC SNAPSHOT FOR DECEMBER 2010 - Economic Snapshot for...

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1 Center for American Progress | Economic Snapshot for December 2010 Economic Snapshot for December 2010 Christian E. Weller on the State of the Economy Christian E. Weller, associate professor, Department of Public Policy and Public Affairs, University of Massachusetts Boston, and Senior Fellow, Center for American Progress December 13, 2010 Private business investment growth continues strongly, but it is too little to overcome other formidable obstacles. Chief among them is the high debt burden of consumers, which holds back consumption growth and contributes to slow job growth. Consequently, the unemployment rate remains high while families experience massive financial distress as foreclosures and credit defaults hover near record highs. Building a bridge to a stronger, self-sustaining recovery hence remains a top policy prior- ity. American families will have to work longer for no good reason if policymakers fail to build on the successes of recent policy interventions such as the American Recovery and Reinvestment Act of 2009. The proposed Middle Class Tax Relief Act of 2010 would offer millions of families much needed income and thus some relief, boost consumption, offer businesses incentives to invest more money more quickly, and help create 2.2 million new jobs. But this new policy initiative still leaves at least one critical obstacle to economic growth unaddressed—it offers no new help to states and localities that continue to see finan- cial shortfalls and lay off employees. 1. The U.S. economy is recovering.
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