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2 Jul, 2010 22:48

US economy in need of fundamental change

Unemployment in the US is up, private sector hiring is weak and thousands of American census workers recently lost their jobs.

Reading too much into job numbers however is not a wise thing to do, argued Atul Singh, the CEO of Atit Global.

He argued that merely analyzing job and unemployment numbers neglects the long term problems of the US economy. There needs to be a change to the focus on over consumption in America, he said.

That has to change. There has to be a fundamental change and it’s going to be a long term process,” said Singh.

Anyone predicting failure or success in the US or global economy is just guessing, said Singh. Hi guess:

The economy shall putter along, it shall be a long process where it sputters back to half life, goes back, sputters back to half life and there’ll be a long process of readjustment because there has got to be a fundamental change,” said Singh.

Singh argued that the fundamental change needed in America is to move from debt and consumption to becoming an economy focused on savings and export.

There is a limit to what the government can do. There is a limit to what any individual business can do. This is a structural adjustment that’ll take time,” said Singh.

Markets, at the end of the day, are going to punish profit guessing. You cannot consume more than you consume forever,” he added.

Singh argued that this trend cannot continue forever. He opposes increased government spending as a mean to solve the economic crisis. The problem is that there is an overreliance on consumption in America and an overreliance on investment in China.

Additionally, in the United States greater transparency in monetary and economic policy is needed in the government and the Federal Reserve, argued Singh. Transparency is essential, he said. Transparency will lead to greater monetary policy decisions.