Economists Say Obama Jobs Bill Will Prevent Another Recession

Author: September 28, 2011 11:00 am

In a joint session of Congress earlier this month, President Obama presented a jobs plan, which he believes will jump start the economy and help prevent another recession. Republicans have been, shall we say, less than receptive.

House Speaker, John Boehner (R-Ohio), criticized the President’s $447 billion jobs plan, saying it “inhibits the efficient flow of capital,” He also said he would object to all revenue, including an increase on the 15% capital gains tax and letting the Bush Tax Cuts expire.

Of course, Boehner isn’t the only Republican criticizing the plan.

Rep. Paul Ryan (R-Wis): “I don’t know if there’s anything positive in this plan.”

Presidential Candidate, Herman Cain: “That’s just class warfare flowering in my opinion and it’s not going to help.”

Rush Limbaugh: “It is designed to exist in principal only. It’s designed to exist so that Obama can lie about what it really is ’cause it’s not a jobs bill, and it exists so that the lack of action on it can be blamed on the Republicans as he does his combo Harry Truman/FDR campaign, Truman running against the do-nothing Congress, and FDR just growing government on steroids.”


Obviously, I could go on for a while. Does it really surprise anyone that the Party of No objects to something the President proposes? Despite the right-wing negative PR blitz, the public is a bit warmer on the jobs plan.

Economists think it will help avoid a double dip recession. According to Bloomberg News:

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.

The legislation, submitted to Congress this month, would increase gross domestic product by 0.6 percent next year and add or keep 275,000 workers on payrolls, the median estimates in the survey of 34 economists showed. The program would also lower the jobless rate by 0.2 percentage point in 2012, economists said.

Economists in the survey are less optimistic than Treasury Secretary Timothy F. Geithner, who has cited estimates for a 1.5 percent boost to gross domestic product. Even so, the program may bolster Obama’s re-election prospects by lowering a jobless rate that has stayed near 9 percent or more since April 2009.

The plan “prevents a contraction of the economy in the first quarter” of next year, said John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC in Boston, who participated in the survey. “It leads to more retention of workers than net new hires.”

In the meantime, Senate Majority Leader, Harry Reid (D-Nev.) has other plans. Before tackling the jobs bill, the Senate will vote on a bill that would crack down on China’s currency manipulation with the intent of helping to even the playing field between American and Chinese companies. The Obama administration is against it.

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