(Bloomberg News) Weak economic growth and a slowing labor market in the U.S. underscore the need for more fiscal and monetary stimulus, said Alan Blinder, former vice chairman of the Federal Reserve.

"I'm definitely in favor of opening the spigot more," Blinder, a Princeton University economist, said today in a radio interview on "Bloomberg Surveillance" with Tom Keene and Ken Prewitt. "At this point I'm willing to support almost anything that would give the economy a little more oomph."

Payrolls in the U.S. rose less than projected in August and the unemployment rate declined as more Americans left the labor force, a government report showed today. Treasuries and gold rose and the dollar weakened on bets the data increase the likelihood Fed officials will announce new plans to spur the recovery when they meet next week.

Policy makers at the central bank have made it clear they are considering extending the period over which they'll keep their target interest rate low and that they may purchase more assets, including mortgage-backed securities, to further reduce long-term borrowing costs, Blinder said.

Since January, the Fed has said economic conditions would likely warrant keeping the benchmark interest rate "exceptionally low" through at least late 2014. The Fed has also made two rounds of large-scale asset purchases totaling $2.3 trillion. The Federal Open Market Committee will release a statement on monetary policy on Sept. 13 after a two-day meeting.

Borrowing Costs

Buying mortgage-backed securities probably wouldn't be a "super-powerful weapon," Blinder said. The number of mortgages worth more than the homes they secure blunt the Fed's ability to spur housing, he said.

While the federal budget deficit, which was $1.3 trillion last year, is an issue, Blinder said he would support a short- term government program focused on job creation. Such a plan could entail between $400 billion and $500 in spending coupled with 10 times as much deficit reduction over a decade.

"When you have interest rates as low as they are and the economy as weak as it is, it's clear that not only can we afford to spend more in the short term, making it up in the long term, but that we should," he said.

Policy proposals by Republicans, including presidential candidate Mitt Romney, won't boost the expansion, Blinder said. The 66-year-old Princeton professor advised Democratic presidential nominee John Kerry during the 2004 election campaign.