'WE BELIEVE the stimulus has had the impact that we predicted, which is job creation,' he said.

For some, the impact is not enough to counter the economy's downward spiral.

Mr Paul Krugman, the Nobel laureate Princeton economist, said on his blog that the problem 'is not that the stimulus is working more slowly than expected; it was never expected to do very much this soon. The problem, instead, is that the hole the stimulus needs to fill is much bigger than predicted.' 'That - coupled with the fact that yes, stimulus takes time to work - is the reason for a second round, ASAP,' he said.

Mr Andrew Busch, analyst at BMO Capital Markets, said, 'As the summer wears on and discontent grows, I expect calls will be louder and louder for additional stimulus from Congressional Democrats to put more Americans to work.' But he argued that because of the massive deficit spending required, a new program could do more harm than good by 'expanding the fiscal deficit beyond its current distended fiscal bloat.' A report by IHS Global Insight found that just US$18.6 billion had been allocated to local infrastructure projects by June 3, and said more needs to be allocated to cities to offset the spending collapse.

'Without the economic recovery of metro economies, there can be no US recovery,' the report said.

Mr Irwin Stezler, senior fellow and economist at the conservative Hudson Institute, said lawmakers may be more circumspect about any new stimulus plan.

'The promised 2.5 million jobs have not materialised,' Mr Stelzer said.

'It turns out that the label 'stimulus' was slapped on a grab-bag of spending projects that could not be initiated in time to affect the jobs market - only some 15 per cent of the stimulus money has been spent. Or it just might be that borrow-and-spend is not the route to recovery' Morgan Stanley economists Richard Berner and David Greenlaw said in a research note that an additional stimulus might pump too much money into the system and spark inflation.

'While the recession is not over, we believe it will wind down later this summer,' they wrote. 'Thus, not only is further stimulus unnecessary, but additional spending or tax cuts could represent a classic pro-cyclical policy mistake.' -- AFP