For the next several weeks, the nation's pundits will be blowing hot air about the $450 billion jobs proposal President Obama unveiled last night. Passing the torch to the people who specialize in this type of thing, we've rounded up the views of economists assessing the package in its present form (keep in mind, the Republicans will likely try to chip away at parts of the plan as Congress deliberates the legislation). We've divided the economists into two camps, pro and con. Many, as you would imagine, agree and disagree with the proposal for different reasons:
It's a good proposal Mark Zandi, chief economist at Moody's Analytics, is absolutely bullish about the Obama package (though he was also quite bullish on the president's first stimulus package). He tells the Associated Press, he expects the plan to increase economic growth by 2 percentage points, drop unemployment by 1 percent by next year and add 2 million jobs. One of his favorite parts is the administration's decision to reduce Social Security taxes for businesses with payrolls of $5 million or less.
Zandi calls this a "creative" way to help small companies, which have struggled more than larger ones to recover from the Great Recession of 2007-2009. During recoveries, small businesses normally drive job creation. "Something like this is much needed" for an economy grappling with 9.1 percent unemployment, Zandi said. "The economy is on the edge of recession."
Also a fan of the Social Security tax reduction, Susan Wachter,, a finance professor at the University of Pennsylvania, tells the AP the move would increase economic growth by 1 percent and add 1 million jobs by next year.