President Obama’s plan calls for cutting payroll taxes paid by workers and small businesses, while extending unemployment insurance. It also includes an increase in infrastructure spending and more aid for cash-poor state governments.
Among the positive effects of the legislation, says the Bloomberg survey, are:
- It would increase gross domestic product by o.6 percent
- It would add or keep 275,000 workers on payrolls.
- It would lower the jobless rate by 0.2 percent in 2012. The Bloomberg article quotes several economists’ analyses. For example:
- The plan “prevents a contraction of the economy in the first quarter…It leads to more retention of workers than new hires
- Some 13,000 jobs would be created in 2013, bringing the total to 288,000 over two years, according to the survey. Employers in the U.S. added 1.26 million workers in the past 12 months, Labor Department data show.
The plan has already run up against a wall of opposition in a Republican-run Congress that is more interested in defeating any Obama proposal than in governing and looking out for the overall good of the country. The President’s plan is not as bold as many would wish it to be. And other surveys indicate that Americans don’t believe that the plan will make much of a difference. The Bloomberg Report goes on to cite several conflicting estimates of the program’s potential effects. And, of course, we should never forget the old adage about economists that says, “If you laid all of the world’s economists end to end… they’d never reach a conclusion.”
But at least one of the economists commenting on the plan in the Bloomberg Report notes that doing nothing is not a good option, either. And we have yet to see a jobs plan from Republicans in Congress or from those running for the presidential nomination—other than cutting taxes for the wealthiest among us and waiting for jobs to magically trickle down from the bounty the top 1 percent receives. Plus, it stands to reason that if Americans see that nothing is even being attempted, we’ll feel even more pessimistic about the future–a mindset that creates its own negative momentum. So, it’s essential to think about where the country might go without a specific jobs plan such as the one proposed by President Obama.
“The [Obama] program very well could forestall a recession in early 2012,” said Scott Brown, of Raymond James & Associates. “The important thing to consider is, what happens if we don’t do anything?”