Mon, Feb 21, 2011 - Page 10 News List

Soros says Obama has lost control of economic agenda

Bloomberg

Billionaire investor George Soros said Democratic US President Barack Obama “has lost control of the agenda” on the US economy, leaving it “now in the hands of the Republican Party.”

Republicans “are going to pursue a very strong effort to cut services by refusing to have any tax increases,” Soros said in an interview with CNN’s Fareed Zakaria GPS program.

“I think this agenda will be successful,” though it will be “more directed at cutting services and achieving the ideological purposes of the Republicans rather than to get the economy going,” Soros, 80, said, according to excerpts of the interview released by CNN. “I think this will have a negative impact on the economy.”

The White House had no immediate comment on Soros’s remarks on the program, scheduled to be broadcast yesterday.

Republicans in the House of Representatives are pushing a proposal to cut at least US$61 billion from this year’s spending.

The reduction would come at a time when investment by businesses “isn’t strong enough to take up the slack,” he said.

As a result, unemployment, 9 percent last month, probably will remain high, according to Soros, founder of Soros Fund Management LLC, which oversaw about US$25 billion in assets as of September.

“That’s more or less in the cards because we aren’t applying fiscal stimulus, because of the ideologies that the government can’t do anything right, so we can’t expect the government to help,” Soros said. “So you have idle resources, and the Federal Reserve is providing quantitative easing. Well, I think when it expires, they won’t give it any more.”

Interest rates ultimately will rise and “choke off the economic recovery,” Soros said.

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