by Jiang Xufeng
DENVER, United States, Oct. 4 (Xinhua) -- As the Democratic and Republican presidential candidates laid out different visions for the U.S. economic recovery, experts reckoned the economy was in a better shape despite headwinds for a tepid recovery.
Mitt Romney said in a speech on Aug. 30 when he accepted the GOP presidential nomination that every president seeking re-election would ask voters a key question: "Are you better off than you were four years ago?"
"(President Barack) Obama cannot tell us that you're better off today than when he took office," because the country is still struggling with high unemployment rates, dwindling family income and trillions of new federal government debt, Romney said.
The two presidential candidates on Wednesday fought hand-to-hand over economic topics, including job creation and federal deficit, during their first debate in Denver, Colorado.
Romney blasted Obama on his "failed" economic policies which the Republican challenger said have led to higher gasoline and food prices and spiking federal debt.
CONTROVERSIAL GOVERNMENT ROLE
During Obama's administration, the federal government's spending has hovered around 24 percent of the nation's economic output, higher than the long-term trend of about 20 percent.
Republicans and Democrats were considering how to strike a balance between the government and the market.
Moody's Analytics chief economist Mark Zandi reckoned that Obama's 830-billion-dollar stimulus plan in 2009 helped avert a second Great Depression.
However, Romney and his running mate, Wisconsin Congressman Paul Ryan, charged that the stimulus plan and other entitlement programs have pushed the nation's debt past the threshold of 16 trillion U.S. dollars, more than 100 percent of the country's GDP.
The U.S. national debt has increased more than 5 trillion dollars during Obama's tenure.
Romney has repeatedly stated that he would cap annual federal spending below 20 percent of the GDP and that Obama was putting the United States "on the road to Greece."
The central government's budget deficit has surpassed 1 trillion U.S. dollars under Obama's watch for the fourth consecutive year. Global rating agency Moody's Investors Service warned last month that it could strip the United States of its top-shelf triple-A credit rating if the country's lawmakers could not reach a medium-term debt reduction plan.
Weak economic and revenue growth could lead to a negative feedback loop. Economists like Carmen Reinhart, a senior fellow at the Peterson Institute for International Economics, said that serious public debt overhangs might cast a shadow on future economic growth.
STOPPING FREE FALL
With the nation's financial system faltering on the verge of collapse and housing prices plummeting, massive government rescue and spending programs during the Obama administration helped prevented the economy from free falling. The world's largest economy has regained growth since the third quarter of 2009.
"Four years ago, we went through the worst financial crisis since the Great Depression. Millions of jobs were lost. The auto industry was on the brink of collapse. The financial system had frozen up. And because of the resilience and the determination of the American people, we've begun to fight our way back," Obama said in the debate.
Economic prospects are 100 percent better now than four years ago when Americans were "looking into the abyss," Edwin Truman, a senior fellow at the Washington-based Peterson Institute for International Economics, told Xinhua.
The U.S. real GDP shed 3.1 percent in 2009, but gained 2.4 percent in 2010 and 1.8 percent in 2011. The world's largest economy expanded by 2 percent and 1.3 percent in the first and second quarter respectively this year, data from the Commerce Department showed.
The housing market has also gained steam in recent months, about five years after the housing bust.
Sales volume of new single-family houses rose to a two-year high in July, but was still half of the level considered healthy by economists. The average housing prices of 270,600 U.S. dollars in July, meanwhile, were not far from the average estimate of 301,900 dollars in July 2008, U.S. Commerce Department figures showed.
"A fairer question to ask is that would the U.S. economy be worse off if there were no such stimulus from the Obama administration," said Sun Tao, a senior economist with the International Monetary Fund.
"The ongoing deleveraging process, still gloomy housing market, and huge fiscal deficits constitute the major challenges for any incoming administration. In prospect, the robust and consistent recovery of the U.S. economy hinges on a delicate balance between short-term stimulus and medium-term structural reforms," Sun said.
BETTER LABOR MARKET
Job reports have often drawn divided views from Democrats and Republicans on economic recovery, a topic highlighted in this year's election.
The unemployment rate edged down to 8.1 percent in August, about 1 percentage point lower from one year ago, according to the Labor Department.
If Obama could win re-election this year, he would become the first U.S. president since Franklin Roosevelt to do so with the unemployment rate hovering more than 7.2 percent.
High unemployment has become a frequently used line of attack by Romney. Obama said that businesses had added jobs for 30 months in a row by August, stressing he needed more time to slash the unemployment rate to pre-crisis levels.
To court working-class voters, Romney on Wednesday laid out a five-point plan to create 12 million jobs in the next four years. The plan includes achieving energy independence, opening new foreign markets for U.S. goods and services, slashing government spending and reducing taxes on small businesses.
However, with the anemic economic recovery, U.S. Nobel Prize-winning economist Joseph Stiglitz did not expect the labor market could return to maximum employment until 2018.