Economists Weigh Effectiveness Of Obama Job Plan
Economists have been looking over the $447 billion job-creation package President Obama proposed to Congress Thursday night. Predictably, the reaction was mixed, with most economists giving it a thumbs up, and many conservatives turning thumbs down.
Here are a few of the economists' opinions that were blogged, tweeted, reported or emailed around.
UP — Mark Zandi, chief economist at Moody's Analytics and former adviser to Republican presidential candidate John McCain. He projects the Obama plan would add 2 percentage points to economic growth in 2012, add nearly 2 million jobs and reduce the unemployment rate by 1 percentage point. "There should be nothing controversial about this piece of legislation. Everything in here is the kind of proposal that's been supported by both Democrats and Republicans," Zandi said.
DOWN — Peter Morici, professor at the Robert H. Smith School of Business at the University of Maryland. "The president proposes a package that will do little to boost domestic demand, and that will permanently hamstring the economy with higher taxes and mindless bureaucracy. [He] proposes spending an additional $140 billion on roads, schools and other infrastructure, but wants Congress to pay for this with cuts in spending on Medicare, Medicaid and other programs. How will adding construction workers to the national payroll, while laying off health care workers, boost employment?"
UP — Paul Krugman, economist and New York Times columnist. "I was favorably surprised by the new Obama jobs plan, which is significantly bolder and better than I expected. It's not nearly as bold as the plan I'd want in an ideal world. But if it actually became law, it would probably make a significant dent in unemployment."
DOWN -- James Sherk, senior policy analyst in labor economics for the Heritage Foundation, a conservative research group. In 2009, "the stimulus bill extended unemployment benefits, Congress has kept them in place several times since then, and the federal government has spent over $300 billion on unemployment benefits since Obama took office. It hasn't stimulated the economy before. It's not going to stimulate it now."
UP — Heidi Shierholz, labor economist with the Economic Policy Institute, a liberal research group. "President Obama's jobs plan, if implemented, would boost employment by around 4.3 million jobs (yes, 1.6 million of those jobs would come from continuing temporary policies that are already in place and supporting the economy today, but the new initiatives alone would generate 2.6 million jobs). ... This plan is a vital step in the direction of providing a solution that matches the scale of the ongoing crisis."
UP-ish — Gavan Nolan, director of credit research for Markit, a London-based financial information services firm. "Some of the [president's] measures — if they are implemented — should have a material impact on unemployment."