George Osborne was today accused by Chief Secretary Liam Byrne of making “a complete clown of himself” as he asserted that the US would be out of recession even without the stimulus, a claim denied by the two of the most senior economic figures in President Obama’s administration.
Asked by Jon Sopel on BBC News about the US stimulus, Osborne said:
“Well first of all, as I think I have said already, the White House has confirmed that they would be out of recession in the US even without the stimulus.”
But a statement by President Obama’s Chair of the Council of Economic Advisers Christina Romer, earlier today read:
“Analysis by both the Council of Economic Advisers and a wide range of private and public-sector forecasters indicates that the American Recovery and Reinvestment Act of 2009 contributed between 3 and 4 percentage points to real GDP growth in the third quarter. This suggests that in the absence of the [stimulus], real GDP would have risen little, if at all, this past quarter.
Meanwhile in an interview on Charlie Rose, US Treasury Secretary Tim Geithner said:
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“The stimulus and getting credit flowing again were tremendously important for getting things to turn around when the economy was in free-fall. The achievements you see today are the consequences of government policy. The private sector couldn’t have gotten it done by itself.