World Business

Soros: Now is not time to cut back on stimulus

By Laura Marcinek and Katherine Burton (China Daily)
Updated: 2010-07-20 09:50

George Soros, chairman of Soros Fund Management LLC.[Bloomberg]

NEW YORK - Billionaire investor George Soros said US lawmakers should refrain from withdrawing stimulus measures because the economy hasn't strengthened enough.

"I think the timing is wrong with withdrawing the stimulus," Soros said at the Hamptons Institute in East Hampton, New York on July 16.

"Cutting employment benefits, cutting aid to states that are losing tax revenue, these are counterproductive because you can only grow your way out" of the financial crisis, said Soros, who turns 80 next month.

Soros noted that there are no signs of inflation in the US, where 10-year Treasury notes are now trading below 3 percent, the lowest level so far this year.

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Soros, who is the chairman of New York-based Soros Fund Management LLC, has made similar comments about Europe and the need for Germany to refrain from cutting back its own deficit spending. The result will send Europe into a deflationary cycle, he said.

President Barack Obama over the weekend called on Republicans to stop blocking legislation in the US Senate extending unemployment benefits and to support measures making it easier for small businesses to expand.

In his weekly address on radio and the Internet, Obama criticized Senate Republicans for preventing action on another extension of long-term unemployment benefits that millions of Americans rely on to pay their bills.

"Think about what these stalling tactics mean for the millions of Americans who've lost their jobs since the recession began," he said. "For many, it was the only way to make ends meet while searching for work."

Bloomberg News