US economy growing n But for many life is not getting better WHEN people say that the recovery does not feel like a recovery, they are describing reality. The economy is growing, but for many Americans life is not getting better. Unemployment remains high. Home values are depressed. And state budgets are in deep trouble, presaging more layoffs, service cuts and tax increases, The New York Times said in its editorial. Excerpts: The question for 2011 is whether growth will ever translate into broad prosperity. For that to happen, the federal government must ensure that the recovery does not falter for lack of adequate stimulus, while fostering job-creating industries and committing itself to long-term deficit reduction. With corporate profits robust and a one-year payroll tax cut set to start this month, there are reasons to hope for continued growth in 2011. Yet, growth is not expected to be strong enough to make a real dent in unemployment, which at 9.8 percent remains close to the recession's peak of 10.2 percent in October 2009. Rising corporate profits should spur hiring, but recent history is not encouraging. Part of the problem is that companies are more apt to spend their cash on stock buy-backs and acquisitions that increase share prices but not hiring. Many companies that are hiring are doing it in fast-growing markets like China and India. The rift between recovery and prosperity is also painfully evident in housing. Prices are likely to fall another 5 percent in 2011, as unemployment-related defaults and the failure to adequately address the foreclosure crisis add to the inventory of unsold homes. Joblessness and the housing bust will continue to batter state and city budgets in 2011. Promises by so many newly elected state officials to balance their budgets without raising any taxes are not only cynical, they are a recipe for more crises to come. President Obama's recent tax-cut deal with the Republicans included measures to support growth, notably extended unemployment benefits, and the payroll tax cut. Deep state budget cuts could offset much of that, unless Congress funnels more aid to states. Such efforts, while vital, are only the start. Competing in a global economy requires spare-no-expense effort to improve education. And Washington needs to do a lot more to help create globally competitive industries with jobs that pay well. We have heard President Obama talk about green jobs and rebuilding the nation's infrastructure. The country and the economy need a big idea and a big project to move forward. __
