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Obama’s tax hikes threaten a new US recession
By Martin Feldstein
The recent payroll gains and the declining unemployment rate in the United States have raised hopes that the economy will now start growing faster than the tepid 1.7 per cent rate of last year. Optimists are expecting growth rates as high as three per cent for this year and next.
I hope they are correct. The recession that began in December 2007 was deep and painful and the recovery that began in June 2009 has been slow and grinding in spite of unprecedented fiscal outlays and an even larger monetary stimulus. House prices have continued to fall and housing construction remains dormant because of the Obama administration’s failure to reduce the large number of homeowners whose mortgage debt exceeds the value of their homes. Business investment has been depressed by the anti-business rhetoric and policies of Mr Obama’s government.
