MercoPress. South Atlantic News Agency

Billionaire Buffet suggests US may need second stimulus package

Unemployment in the US could reach 11% in coming months warns Buffet

United States widely respected investor and financial wizard Warren Buffet said on Thursday unemployment in the US could reach 11% and a second stimulus package could be needed to pull the world’s largest economy out of recession.

“I think that a second one may well be called for” the billionaire founder of Berkshire Hathaway said on ABC's “Good Morning America” program.

“Our first stimulus bill... was sort of like taking half a tablet of Viagra and having also a bunch of candy mixed in,” he said, “as if everybody was putting in enough for their own constituents.”

Indeed, new reports show the money from President Obama's 787 billion US dollars economic stimulus package is potentially being doled out unevenly. A recent analysis from the New York Times showed rural areas is receiving a disproportionate amount of funds for transportation projects.

“Two-thirds of the country lives in large metropolitan areas, home to the nation’s worst traffic jams and some of its oldest roads and bridges,” the NY Times reports. “But cities and their surrounding regions are getting far less than two-thirds of federal transportation stimulus money.”

Additionally, USA Today reported that counties that supported Mr. Obama in the presidential election have so far received two times more money per person, from the stimulus package as those that supported Republican John McCain -- though that likely has more to do with bureaucracy than politics.

“We're not in a freefall, but we're not in a recovery either” said Buffet who added that “we were in a freefall really in the last quarter of last year, starting in the financial markets and spreading to the economy, and we had this huge change in behaviour”.

“I think a second one may well be called for. It is not a panacea. A stimulus is the right thing. You hope it doesn't get watered down,” he said.

Buffett said unemployment had “a ways to go” and he would not be surprised to see it hit 11% before it recovers. “I'm not predicting it, but not that it would surprise me,” he said of the 11 percent figure.

“We're going to come out of this better than ever, the best days of America lie ahead but not next week or next month,” he said.