The proposed economic stimulus package in the US is likely to fail to stimulate spending, the National Retail Federation (NRF) has warned.
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Addressing its concerns to the US Senate yesterday (5 February), the retail body said that the legislation under consideration does not do enough for consumers.
The NRF repeated its call for a series of national sales tax ‘holidays’ in order to give an immediate boost to spending.
“While the legislation currently under consideration includes a number of provisions designed to produce long-term economic growth and job creation, we are extremely concerned that it does not do enough to immediately stimulate consumer spending or to preserve the tens of millions of jobs that consumer spending supports,” NRF senior vice president Steve Pfister wrote in a letter to the Senate.
“With consumer spending representing two-thirds of GDP, it is difficult if not impossible to foresee an improvement to overall economic growth until consumers regain confidence and resume spending.
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By GlobalData“We believe national sales tax holidays would be a powerful and cost-effective tool to achieve that goal. Long-term economic stimulus is critically important, but immediate economic stimulus is absolutely essential.”
According to Pfister, increased sales resulting from these ‘holidays’ would help jump-start the economy while also helping to preserve a “significant” number of jobs throughout inter-related sectors, including retail, manufacturing and transport.
Pfister’s comments came as the US Senate debates amendments to the American Recovery and Reinvestment Act of 2009, the package of economic stimulus measures passed by the House last week.
In December, the NRF proposed a series of national sales tax holidays be held during March, July and October 2009, each lasting ten days including two weekends.
