Jan. 30 (Bloomberg) -- Laura Tyson, an adviser to President Barack Obama during his election campaign, said the U.S. government’s stimulus measures are “front-loaded” to ensure they start bolstering the economy in 2009.

“These spending increases and tax relief will be feeding into the economy gradually over this year,” Tyson said in a Bloomberg Television interview today in Davos, Switzerland. “It’s designed to be very much front-loaded so we can give a real boost to the economy through the second half of the year.”

U.S. data today will probably show the economy shrank the most since 1982 in the final months of last year, economists’ forecasts show. The $816 billion stimulus before Congress, equivalent to one-quarter of the federal budget, comes as Obama’s administration considers other measures to fix the banking system and restore the flow of credit.

“The real issue here is to achieve a certain level of capital adequacy,” Tyson, a professor at the University of California, said. “There’s no plan in the U.S. to have a long term nationalization of the banks” and it’s not intended that “a whole bunch of bureaucrats will govern a bank.”

The Treasury Department has injected about $200 billion into banks across the country through its Troubled Asset Relief Program. Treasury Secretary Timothy Geithner said yesterday his officials are considering a “range of options” for righting financial markets, aiming to preserve the banking system.

Economic Data

Gross domestic product contracted at a 5.5 percent annual pace from October through December, according to the median estimate of 79 economists surveyed by Bloomberg News. Consumer confidence in the U.S. sank to the lowest level on record in January, signaling a further slide in spending.

Asked about impact of economic contraction in the fourth quarter on consumer confidence, Tyson said, “I don’t think a particular number is going to make a difference.”

“There will be some real effort to work on foreclosure relief, Tyson said. “That’s a very important part of addressing consumer confidence and getting the economy onto a more stable path,” she said.

U.S. Foreclosure filings jumped 41 percent in December from a year earlier to 303,410, RealtyTrac Inc. said on Jan. 15.

Tyson said that the stimulus will aim to be “taking a lot of the loans that Americans hold on their houses, their mortgages and modifying them to extend the terms of repayment.”

Officials want to “reduce the principle of the loan, reduce the interest rate, get people able to stay in their homes,” she said.

The worst U.S. housing slump since the Great Depression has pushed up the cost of credit globally and caused stock markets to tumble. The world’s biggest financial companies have incurred more than $1 trillion in writedowns and credit losses since the start of last year after the subprime mortgage market collapsed.

To contact the reporters on this story: Christian Vits in Frankfurt cvits@bloomberg.net; Francine Lacqua in Davos, Switzerland at flacqua@bloomberg.net

Last Updated: January 30, 2009 06:39 EST