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DEAN OF TEMPLE UNIVERSITY'S SCHOOL OF BUSINESS AND MANAGEMENT TESTIFIES AT CONGRESSIONAL HEARINGS ON U.S. ECONOMIC RECOVERY

 DEAN OF TEMPLE UNIVERSITY'S SCHOOL OF BUSINESS AND MANAGEMENT
 TESTIFIES AT CONGRESSIONAL HEARINGS ON U.S. ECONOMIC RECOVERY
 WASHINGTON, Dec. 17 /PRNewswire/ -- Following are excerpts from testimony by William C. Dunkelberg, dean of Temple University's School of Business and Management, in Washington before the U.S. House Committee on Ways and Means during today's hearings on Economic Recovery and Government Policy:
 "The 1983-90 'expansion'...died primarily from excess accumulation of assets. Historically, this has happened before, such as the 1974-75 inventory recession. This time, the excess assets are of a longer-lived nature: office space, warehouse space, retail space, strip malls, multi-family dwelling units, single family homes (often in large developments) and in some areas too many new small firms.... In simple terms, we accumulated too much 'stuff.' Most consumers could go for years without buying a new durable good and still not substantially compromise their standard of living.
 "Until this 'stuff' depreciates or becomes utilized, there is little economic incentive to create more of it. Viewed another way, the cash flow (or economic return) associated with building yet another office building almost anywhere in the U.S. is virtually 0. No one will rent it, lease it, buy it or even look at it....
 "What remains? Tax and spending policy. There are a number of proposals being discussed, most of which seem aimed at next year's elections rather than focusing on the long-term growth needs of the economy.... Most...seem more concerned with generating votes than jobs....
 "There is little that can be done in the short-run to help the economy. There is little need in most families to buy more durables and certainly we don't need more office and retail space. Lower interest rates will not stimulate more spending here. Even tax cuts may have little impact, as consumers on average may reduce debt and save rather than spend.
 "One exception might be an intensive infrastructure program. Unemployment is high in the construction industry (which built the over- supply of privately held long-term assets), so there is plenty of capacity to get the 'roads and bridges' work under way.
 "...If you want growth and real job creation which maximizes each individual's opportunity to do well for themselves, you know what must be done. If your goal is to find a quick payoff that might impact voting behaviors in 1992, you also know what to do."
 /delval/
 -0- 12/17/91
 /CONTACT: Harriet K. Goodheart of Temple University, 215-787-7476/ CO: Temple University ST: Pennsylvania IN: ECO SU:


MK-LJ -- PH026 -- 3068 12/17/91 15:28 EST
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Date:Dec 17, 1991
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