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Economy forum looks to 2010 for recovery |
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Economy forum looks to 2010 for recovery
By Michael L. Diamond • BUSINESS WRITER • April 7, 2009
The Asbury Park Press
TOMS RIVER — The government has jumped in to spark lending, promote energy efficiency and convince consumers to buy homes and cars, all to prevent a damaged economy from slipping further, experts said Monday.
Local business owners said it can't take effect fast enough.
"Right now, psychologically, the consumer is overwhelmed," said David Wintrode, chief executive officer of Causeway Family of Dealerships in Stafford. "They're overwhelmed with uncertainty."
Wintrode and other business experts looked at the recession and the prescription for recovery at The Economic Recovery Summit at Ocean County College.
The event came as workers both nationwide and in New Jersey lose their jobs in droves. But it also spotlighted programs that have some economists predicting a rebound at least by next year.
"If we can survive 2009, I think we're going to see some signs of economic life in 2010," said James W. Hughes, an economist and dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.
The U.S. economy, largely built this decade on easy access to credit, is going through a painful retreat. It has lost more than 5 million jobs since December 2007, pushing its unemployment rate from 4.9 percent to 8.5 percent in March.
The Shore has been hit hard, too. Ocean County's unemployment rate was 10.2 percent in February compared with 6.2 percent in February 2008. Monmouth County's unemployment rate was 8.1 percent in February compared with 4.9 percent in February 2008, according to state figures.
Rep. John H. Adler, D-N.J., said the federal government has pumped trillions into the economy to prevent banks from failing, to buy securities and to keep credit moving. It essentially has taken the place of a private sector that has lost its confidence.
Economists have said "the only way to save capitalism right now is to have massive government intervention," Adler said.
Panelists said the federal government's economic recovery plan includes other incentives to create jobs. Among them: Energy conservation. The federal government offers tax credits to homeowners who install everything from energy-efficient doors and windows to heating and air-conditioning units.
Local utilities plan to spend millions of dollars in energy-conservation projects.
New Jersey Resources Inc., for example, applied for state approval for 14 projects during the next three years, said Thomas Massaro, the company's vice president of marketing and business intelligence.
"These are jobs we believe will be put into place in short order," Massaro said.
Consumer spending. The federal government offers tax credits for consumers buying homes and cars. For example, first-time home buyers and home buyers who have rented for the past three years are eligible for an $8,000 tax rebate. Low- and middle-income consumers buying a new car can deduct the sales tax.
"Things are starting to look up," said Jerrod Grasso, vice president of the New Jersey Association of Realtors. "We're not back to 2005 numbers, but what we're seeing is houses under contract."
Most observers said the economy is shifting to one that is not only more frugal, but also is more sustainable.
"When this is all over, there will be a new reality," said Emil Kaunitz, chief executive officer of Specialty Systems Inc., a Toms River software company. "Life is going to be different than it was in the past."
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