Economists Say Obama's Jobs Bill Will Have Small Effect on Unemployment
1 year ago
Experts say even if it passes, jobless rate will still be high
President Obama is screaming for Congress pass his jobs bill right away, but that doesn't mean that things will change right away.
Associated Press reports:
The 1.9 million new jobs the White House says the bill would produce in 2012 falls short of what is needed to put the economy back on track to return to pre-recession jobless levels of under 6 percent, from today's rate of 9.1 percent.
That's how deep the jobs hole is. The persistent weakness of the U.S. economy has left 14 million people unemployed and more than 25 million unable to find full-time work.
Economists of all stripes pretty much agree that it will be a long, hard road no matter what Congress does. Right now, the Republicans who run the House and the Democrats who lead the Senate aren't finding much common ground.
Obama estimates his American Jobs Act would lower unemployment by just a single percentage point by next year, to just over 8 percent, heading into the 2012 presidential election.
Burned before by making overly optimistic job-creation predictions, the White House turned to prominent outside economists to crunch the numbers.
The projection of 1.9 million new jobs, a 1 percentage point drop in the unemployment rate and a 2 percentage point increase in the gross domestic product under Obama's plan came from Mark Zandi, chief economist of Moody's Analytics.