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2012年7月30日 (月)

米GDP低迷 景気失速を防ぐテコ入れ策を

The Yomiuri Shimbun (Jul. 30, 2012)
U.S. needs to act quickly to stop economy from stalling
米GDP低迷 景気失速を防ぐテコ入れ策を(7月29日付・読売社説)

The slowdown of the U.S. economy is becoming more apparent. The U.S. government will need to take more drastic economic stimulus measures.

Washington has announced in a preliminary report that U.S. real gross domestic product from April through June rose by an annualized 1.5 percent compared to the previous quarter. This was the first time in three quarters that the growth rate had dipped under 2 percent.

The weak economic growth can be attributed to dull capital investment by companies and a sluggish increase in consumer spending, compounded by the deteriorating employment market, where the jobless rate has been stuck above 8 percent. A resurgence of the European financial crisis has also adversely affected economic growth in the United States.

The U.S. economy seemed to have shifted onto a recovery track at the end of last year, but its momentum did not last long.

Some observers predict the U.S. economy will remain at a standstill and slow further from the latter half of this year through next year.


'Fiscal cliff' looms

German and French leaders have agreed to use every possible means to deal with the deterioration of Spain's financial stability, but precisely what this will entail is still unclear. The slump of the U.S. and European economies is a destabilizing factor for the global economy.

The problem is that financial and monetary policies implemented by the United States to support its economy seem to have hit a brick wall.

Large-scale tax breaks such as income tax cuts implemented by former U.S. President George W. Bush since 2001 will expire at the end of this year. Furthermore, based on an agreement between the ruling and opposition parties aimed at fiscal rehabilitation, a measure to automatically trigger a reduction of federal expenditures is scheduled to start next year.

This combination of effective tax hikes as a result of the end of Bush-era tax cuts and slashing federal spending has been dubbed "the fiscal cliff."

Excessive fiscal austerity would be like tumbling down the cliff and batter the economy. We think U.S. President Barack Obama's attempt to alleviate its impact by proposing a plan to extend expiring tax cuts for low- and middle-income earners is reasonable.

However, the opposition Republican Party, which has cranked up its adversarial stand against Obama as the November presidential election nears, does not seem willing to make any concession. It demands an across-the-board extension of the tax cuts for all Americans, including the wealthy. This issue looks likely to be settled after the election.


Additional measures

With Washington unable to hammer out adequate financial measures anytime soon, expectations will rise that monetary policies will have some effect--for a while--in supporting the economy.

At the end of June, the U.S. Federal Reserve Board extended monetary easing measures for six months, which aim to drive long-term interest rates lower by buying more long-term government bonds to increase the percentage that it owns. However, the Fed postponed the third round of bond purchases known as QE3 (quantitative easing), which had been attracting the attention of the markets.

The Fed should not hesitate to launch QE3 and other additional measures if the employment situation continues to worsen and the markets fall into a panic if the European financial crisis expands.

However, any additional measures by the Fed likely will boost the historic appreciation of the yen against the U.S. dollar and the euro, and have a serious negative impact on Japan's economy.

We hope the government and the Bank of Japan will be extremely watchful of the situation and consider the possibility of intervening in the markets to prevent the yen from soaring even higher, as well as taking other monetary easing measures.

(From The Yomiuri Shimbun, July 29, 2012)
(2012年7月29日02時25分  読売新聞)


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