COLLEGE PARK, Md., Jan. 11 (UPI) -- The U.S. economy is in a depression, a University of Maryland economics professor contends.
Professor Peter Morici, a former chief economist at the U.S. International Trade Commission, said the American economy is in a worse condition than a recession, Kiplinger reported in its January issue.
Among other factors, Morici noted 2.6 million payroll jobs have been lost since December 2007, the dollar is falling value and the nation has a big trade deficit with China.
"The economy contracted at about a 5 percent annual rate in the fourth quarter. This looks worse than a recession to me," he said.
Morici said President-elect Barack Obama has clear economic challenges before him when he takes office this month.
"The economy will not recover without fundamental changes in banking and trade policy. A large stimulus package, though necessary, will only give the economy a temporary lift," he said. "The economy is in a depression, not a recession."
Among the other issues facing the former Illinois senator is energy production, he said.
"Politically correct promises to create millions of new jobs producing alternative fuels makes effective presidential campaign slogans, but realistic policies for governing require aggressive development of more conventional oil and gas, as well as non-conventional energy sources." he said.