The federal government should not consider a new stimulus package, even with US unemployment likely to penetrate the 10% barrier and stay there for a while, former Federal Reserve chairman Alan Greenspan said.
“The focus has got to be on trying to get the economy going, but you also have to be careful that in trying to do too much it can actually be counterproductive,” Greenspan said on ABC’s This Week programme.
Wait and watch: Former Federal Reserve chairman Alan Greenspan. Andrew Harrer / Bloomberg
Greenspan appeared on the programme two days after the labour department reported an unemployment rate of 9.8%, the highest since 1983. The report prompted President Barack Obama to say he’s working to explore any and all additional measures to spur growth.
Third-quarter economic growth is likely to be 3% and possibly even higher, Greenspan said on ABC. Only 40% of the $787 billion (Rs37.7 trillion) economic stimulus package approved in February is in place, he said.
“It’s far better to wait and see how this momentum that’s already begun to develop in the economy carries forward,” he said. “While last week’s unemployment report was pretty awful no matter how you looked at it, the economy is recovering and it would be premature for Obama and congress to enact another stimulus package, Greenspan said.”