Today, the Organization for Economic Co-Operation and Development (OECD) released its Economic Survey of the United States for 2010. According to the survey, the US economy, supported by substantial stimulus measures, has begun to grow again following one of the most severe economic crises since the Great Depression.
OECD Secretary-General Angel Gurría, while presenting the survey in New York City, stated: “It is becoming increasingly clear that the economy has entered a soft patch, but this is not inconsistent with previous recoveries. We don’t see a risk of a double-dip recession. That said, we don’t see either a recovery that is strong enough to put a significant dent in unemployment.”
The survey argues that:
- The best way to strengthen the public finances is to make public spending more efficient, particularly with respect to health-care programs.
- The recent financial crisis revealed weaknesses in financial market regulation and supervision, and although the Dodd-Frank Act aims to address these weaknesses, much work remains to be done at the regulatory level on implementing the legislation and on coordinating reform internationally.
- The federal government has a large budget deficit and much higher debt than before the recession. Fiscal consolidation measures must to be implemented to substantially reduce the deficit and eventually reverse the rise in public debt.
- Training and education programs for the unemployed should be prolonged; such programs could potentially play an important role in facilitating the return to the job market of workers whose skills have been affected by an extended period of unemployment.
- The United States must play a pivotal role in a global agreement to reduce greenhouse gas emissions; government support for emission-reducing technologies is important but insufficient without the appropriate incentives.
- Placing a price on carbon, through either a carbon tax or a cap-and-trade scheme, is the key to providing the correct incentives for a greener economy and would be less economically costly than purely regulatory approaches.