Political Animal


September 28, 2011 8:35 AM Economists: Jobs Act may prevent recession

By Steve Benen

Almost immediately after President Obama unveiled the American Jobs Act, some of its biggest fans were economists and economic forecasters. Moody’s Analytics estimated that the plan would boost economic growth by 2 percentage points and create 2 million jobs. Macroeconomic Advisers wasn’t quite as optimistic, but its analysis projected that the White House plan “would give a significant boost to GDP and employment over the near-term.”

Three weeks later, support for the American Jobs Act continues to be much stronger among economists than members of Congress. Indeed, I suspect the White House will be awfully pleased with this Bloomberg News headline this morning: “Obama Jobs Plan May Prevent 2012 Recession.”

President Barack Obama’s $447 billion jobs plan would help avoid a return to recession by maintaining growth and pushing down the unemployment rate next year, according to economists surveyed by Bloomberg News.

In fairness, the economists surveyed had widely divergent estimates, and some were far more optimistic about the proposal’s impact than others. But the overall consensus among the experts is that the Americans Jobs Act would create hundreds of thousands, if not millions, of jobs, and boost economic growth. Some projected a pretty significant boost: “Goldman Sachs Group Inc. estimated the plan would add 1.5 percent to the economy, while Macroeconomic Advisers LLC said 1.3 percent and UniCredit Research, up to 2 percent.”

Reactions to the Republican approach were far less kind.

A reduction in government spending, the end of the payroll- tax holiday and an expiration of extended unemployment benefits would cut GDP by 1.7 percent in 2012, according to JPMorgan Chase & Co. chief U.S. economist Michael Feroli in New York.

Feroli doesn’t expect big results from the White House proposal, but he nevertheless makes clear the Republican policy would quickly push the economy backwards.

As a practical matter, I don’t imagine this will make much of a difference to Congress. Republicans, after all, “do not accept the legitimacy of scholars and intellectual authorities,” even though they occasionally claim “every economist” agrees with the GOP agenda.

But the Bloomberg report once again brings the debate into focus. The economy is struggling, there are fears it may start to shrink, and the nation needs Washington to act. The president has presented a credible plan that, according to knowledgeable experts who get paid to answer these questions correctly, would give the economy a much-needed boost at an important time.

The choice for Congress seems to down to recovery and jobs vs. negligence and ignorance.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.


Post a comment
  • montana on September 28, 2011 8:42 AM:

    We know which outcome the Republicans want.

    But my question is how do we get that general message over the Fox News firewall?

  • c u n d gulag on September 28, 2011 8:44 AM:

    Most of these guys all proved they'd take a bribe during the derivatives mess, couldn't the White House have paid them off to say that the AJA was the WORST thing for jobs and the economy?

    Maybe then the Republicans would have backed it.

  • ant on September 28, 2011 8:55 AM:

    you link to david brooks?


  • KurtRex1453 on September 28, 2011 9:02 AM:

    This is why I like many others do not read the Wall Street Journal, preferring Bloomberg & the Financiak Times.

  • R. Porrofatto on September 28, 2011 9:06 AM:

    c u n d gulag is exactly right. Preventing a recession is the very reason that pluto-Americans who comprise the modern GOP will oppose it -- at least until they can raid the Treasury for themselves in 2012.

  • steve duncan on September 28, 2011 9:14 AM:

    Florida will be adding quite a few jobs if Obama is reelected. It will take many people to rebuild various infrastructure, homes and businesses once they're destroyed by Hezbollah missiles launched from Havana.

  • DAY on September 28, 2011 9:19 AM:

    The Republican Plan:
    Throw another virgin in the volcano, and pray for rain.

  • kevo on September 28, 2011 9:29 AM:

    Will this story get traction in our MSM? How's the Wall St. Occupation going? Heard anything about it in our MSM? Hey American newsrooms and reporters everywhere, WTF?

    I like it - "Fox News firewall!" -Kevo

  • FRP on September 28, 2011 9:56 AM:

    Seconded Kevo

  • steve duncan on September 28, 2011 10:01 AM:

    kevo, MSNBC all across their evening spectrum of talking heads has covered the Wall St Occupation events extensively. Lawrence O'Donnell had a lengthy, scathing takedown of the NYPD regardng the pepper spraying of several young women, basically behaving themselves, behind police netting. So yes, there has been coverage by some.

  • j on September 28, 2011 10:08 AM:

    So why is no one pushing the Obama jobs plan?
    Seems like the Wall Street protesters could use this for one of the greivances, I hear that there will be protests all over the country this coming week, if anyone knows any of the people out there they could use the jobs plan as something to push for all of us.
    I hear that Cantor is calling on FEMA and asking where his disaster aid is.

  • Anonymous on September 28, 2011 10:18 AM:

    Somewhere recently on the intertoobs I saw a chart breaking out the number of times an actual economist was a guest on a political chat show during the deficit "debate." Given that the cable channels and networks won't be changing that trend any time soon, I doubt Republicans have anything to worry about in terms of the general public finding out what economists agree on with respect to the jobs bill.

  • bcinaz on September 28, 2011 10:28 AM:

    It's no secret that Republicans will now fight it tooth and nail. After all, there's still something like 12% who think Congress is doing a good job. 12% is not near enough to zero for Mitch and John.

  • bdop4 on September 28, 2011 11:19 AM:

    The Jobs Act may prevent a recession, but it still leaves the economy hanging on the ragged edge.

    When will a debate begin on how to implement fundamental changes that will transform the economy back into the juggernaut it once was? New infrastructure, technologies, and industries with global demand.

    First, we need to put the large segment of un/underemployed back into productive jobs.

  • MuddyLee on September 28, 2011 11:29 AM:

    The modern republicans ARE ignorant - deliberately ignorant. They watch Fox News - they listen to rightwing talk radio. They like politicians like Palin, Perry, Bachmann, Cantor, and Ryan. Maybe there should be some real re-education camps where repubs are forced to read washingtonmonthly.com all day long.

  • Zorro on September 28, 2011 11:46 AM:

    Every economist that the GOP likes agrees w/their economic plan. That's both of them.


  • Bartender on September 28, 2011 12:13 PM:

    The Republicans are in no hurry to pass anything that will help this economy. They correctly know that the voting public has the attention span of a gnat so by doing nothing now they very well could win the White House whereby many of these same economic ideas will once again be debated - the only difference being they'll be Republican ideas then.

  • Doug on September 28, 2011 7:30 PM:

    Don't worry about those who only get their "news" via Fox outlets or rely on "talk radio" for their facts. They're beyond help; until they admit their addiction, anyway.
    The people we need to concentrate on are all those who rely on the MSM, but are unaware of its' "peculiarities"; ie, Democrats are always at fault, if Republicans block something on Capitol Hill it's "Congress'" fault, etc. Why anyone thinks it isn't also OUR responsibility to spread the word whenever and wherever we can, countering false and misleading "news" stories with facts, I'll never know.
    While it may not be as heroic as organizing a revolution a la Egypt, Libya or Tunesia, and certainly isn't as ego-boosting as toppling a dictator, it's just as important and necessary. If WE don't care enough, why should we expect anyone else to?
    Or perhaps countering Republican lies is something to be left up to the DNC, DCCC, DSC and OfA?