MercoPress. South Atlantic News Agency

Economy Nobel Prise Stiglitz blasts US 2005 budget

Economy Nobel Prize Joseph Stiglitz strongly criticized the President Bush administration budget project for 2005 sent to Congress last Monday describing it as “unrealistic”, “unproductive” and “dangerous”.

"One of the successes of the US economy is innovation. But the 2005 budget sent to Congress increases military expenditure and reduces other outlays particularly education and research", said Mr. Stiglitz during a conference in Paris.

The budget for the coming year that begins next October totals 2,4 trillion US dollars with strong increases in Defence and Security, and a promise of a deficit reduction to 364 billion from this year's 521 billion US dollars.

Mr. Stiglitz argues that "this budget strangles all non military expenditure", and since this is election year "Congress is in no mood to cut expenditure".

However Michael Moskow from the Chicago Federal Reserve branch was more optimistic about the future performance of the US economy and rejected any early reappearance of inflation.

"The quick rebound of the US economy has led some analysts to fear a resurgence of inflation, however we believe these concerns are premature", said Mr. Moskow addressing the Indiana Chamber of Commerce.

"Even when economic expansion in the second half of 2003 was exceptionally high, we still have to see pressure on labour and capital resources, which usually signal an inflationary tendency", underlined Mr. Moskow in direct reference to the current high unemployment and unused manufacturing capacity of the US economy.