President Obama’s effort to push his $447 billion jobs package got a boost this week when a group of economists surveyed by Bloomberg News gave it a stamp of approval. They said it would help avoid a double dip into recession, maintain economic growth and lower the unemployment rate next year.
The 34 economists surveyed estimate that the legislation would add or keep 275,000 people in jobs and lower the jobless rate by 0.2 percent in 2012 and increase gross domestic product, which is the monetary value of all the finished goods and services produced in the U.S., by 0.6 percent, which is less optimistic than Treasury Secretary Tim Geithner’s prediction of 1.5 percent.
The American Jobs Act calls for an extension of unemployment insurance and a payroll tax holiday, an increase in infrastructure spending for roads and bridges and aid for state governments that are being forced to make difficult cuts due to budget shortfalls.
According to Michael Feroli, a chief economist at JPMorgan Chase & Co., not taking these steps would cut GDP by 1.7 percent in 2012 as opposed to adding a net 0.1 percent to the economy, which he estimates Obama’s plan would do.
“The important thing to consider is: What happens if we don’t do anything?” Scott Brown, chief economist at Raymond James & Associates Inc. told Bloomberg. “Most of all, it prevents a serious drag on the economy next year.”
(Photo: Alex Wong/GettyImages)