Experts agree the economic recovery is ailing, but there’s little consensus on a cure.

President Barack Obama and his allies want to continue stimulus efforts, but Republicans argue that continuing to throw money at the problem is only driving up the national debt.

An August survey of the National Association of Business Economists found that three-quarters of its members believe that promoting economic growth should be a higher priority than reducing the national deficit, according to CNNMoney.com.

With fears about a double-dip recession growing, the survey of 84 NABE economists who work at private-sector companies and industry trade associations provides no clear answer on how to keep that from happening.

Nearly 75 percent of NABE members said they don’t think another stimulus package is necessary to get the economy back on track. At the same time, a majority believe policymakers should do more to boost job growth, said CNNMoney.com.

After rebounding from the most serious economic downturn since the Great Depression, the rate of continued economic growth has slowed significantly. Government figures released last Friday revealed that U.S. domestic product, the broadest measure of economic activity, grew at an annual rate of 1.6% in the second quarter; down sharply from the previously estimated 2.4% growth rate. And it’s a big drop from the 5% growth rate seen in the fourth quarter last year, said CNNMoney.com.

Just under half of the NABE economists said deflation is the main threat to the economy in the short term. Deflation occurs when both prices and demand fall, creating a downward spiral that can stifle economic growth for years, said CNNMoney.com. Responses were mixed whether inflation or deflation posed a greater risk to the economy over the next three years.

There was also little consensus among NABE members on when the Federal Reserve should raise interest rates and begin selling assets it bought during the crisis, said CNNMoney.com.

Only 38% of economists surveyed believe that the nation’s current financial policy is “about right,” but 64% of them supported recent legislation to extend unemployment benefits.

The economists did reach agreement on the issue of tax cuts. A majority of them said that none of the existing tax cuts on individual income, dividends and capital gains should be allowed to expire, said CNNMoney.com.

When Congress returns to session next month, they will have to determine the fate of more than 100 tax breaks that have expired or are set to expire soon.

The U.S. unemployment rate hit 10.2 percent in October — a 26-year high, according to recent figures from the Labor Department.

The country shed 190,000 jobs in September, even as other economic indicators have pointed to a recovery from the recession. President Barack Obama on Friday signed a bill that would extend unemployment benefits up to an additional 20 weeks and extend the first-time homebuyer tax credit.

Republican critics of the Obama administration are pointing to the double-digit unemployment rate as proof that the $787 billion stimulus package is failing; meanwhile, labor unions and some Democrats are calling for more spending to create jobs, according to the New York Times.

The highest level of unemployment came at the end of 1982, when it hit 10.8 percent, reported the Times.

The massive $789 billion stimulus package just passed by Congress contains plenty of cash to shore up ailing banks, but little in the way of direct spending for small businesses, a Feb. 11 report by The Associated Press said.

“The plan does extend two provisions of 2008’s economic stimulus bill that allow small businesses to take a bigger upfront deduction for the cost of new equipment,” the AP said. “But companies whose sales are hurting may be reluctant to make big expenditures, putting those tax breaks out of reach.”

Raymond Keating, chief economist with the Small Business & Entrepreneurship Council, told the AP small business owners needed something better. “We need incentives in the private sector for people to take risks and expand business. Unfortunately, there’s very little of that in this package,” he said.

The savior for small businesses, economists say, will come when consumers start dusting off their wallets.
“The best thing to happen to small business is if customers come in,” William Dunkelberg, chief economist with the National Federation of Independent Business, a Washington-based small business advocacy group, told the AP.

The big problem with the economy now is “the guy whose job is not at risk has been scared into not spending,” he said, adding the recession’s grip will ease when they start buying again.

In the meantime, small business advocates say extending the Section 179 and bonus depreciation provisions into 2010 because makes more sense because it is unlikely small businesses will be investing much in the near term.