Economists agree that The American Jobs Act delivers

Posted by AzBlueMeanie:

The economists have weighed in on The American Jobs Act and they agree that it delivers a significant boost to the economy and jobs. Now it will require convincing the "Do Nothing" Tea-Publican Congress that wants to destroy the American economy to prevent President Obama from having a major success on the economy as part of their partisan electoral strategy to "pass this bill." It is time Tea-Publicans put the interests of the country ahead of their partisan politics.

Jonathan Cohn at The New Republic reports Experts Say The Economy Needs A Boost That Is Big, Fast, And Smart. The American Jobs Act Fits That Criteria:

A few weeks ago, when President Obama announced his intention to propose a major jobs bill, I asked a group of respected economists what, in an ideal world, such a bill would contain. They agreed on three basic criteria: Size, speed, and smarts. In other words, it would be big, it would be quick, and it would be self-sustaining in the long run.

The American Jobs Act may not be perfect. And, lord knows, it may not pass Congress in any recognizable form. But it appears to meet those three key criteria, or at least come reasonably close.

Continue reading The New Republic.

Nobel Prize winning economist Paul Krugman, a frequent critic of President Obama's economic program for not being "big and bold" enough, is also impressed. Setting Their Hair on Fire:

First things first: I was favorably surprised by the new Obama jobs plan, which is significantly bolder and better than I expected. It’s not nearly as bold as the plan I’d want in an ideal world. But if it actually became law, it would probably make a significant dent in unemployment.

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O.K., about the Obama plan: It calls for about $200 billion in new spending — much of it on things we need in any case, like school repair, transportation networks, and avoiding teacher layoffs — and $240 billion in tax cuts. That may sound like a lot, but it actually isn’t. The lingering effects of the housing bust and the overhang of household debt from the bubble years are creating a roughly $1 trillion per year hole in the U.S. economy, and this plan — which wouldn’t deliver all its benefits in the first year — would fill only part of that hole. And it’s unclear, in particular, how effective the tax cuts would be at boosting spending.

Still, the plan would be a lot better than nothing, and some of its measures, which are specifically aimed at providing incentives for hiring, might produce relatively a large employment bang for the buck. As I said, it’s much bolder and better than I expected. President Obama’s hair may not be on fire, but it’s definitely smoking; clearly and gratifyingly, he does grasp how desperate the jobs situation is.

Lawrence Mishel at the Economic Policy Institute agrees. How effective is President Obama’s jobs plan?:

[T]he package provides a substantial boost to the economy in addition to continuing the important efforts already underway (providing unemployment compensation and the payroll tax holiday). The components of the plan are highly effective for the most part, including spending on various types of infrastructure, support for teachers and first responders, and a new jobs tax credit. So, it will be effective and at a scale that can really move the dial. The initial year (or more) will be deficit financed so the effort doesn’t take away with one hand what the other hand had already done—paying for the program in the out years of a 10-year period allows this. So, the plan does get high grades.

Even conservative economic analysts agree The American Jobs Act has elements that will improve the economy and jobs. Obama’s Job Plan Hinges on Cut to Social Security Tax – NYTimes.com:

Preliminary analyses of the White House plan estimate that the tax cuts could create more than 50,000 jobs a month, a significant boost considering that employment climbed by 35,000 jobs, on average, in each of the last three months. But even if Congress immediately agreed to pass the president’s entire plan, the economy is likely to continue to struggle. Companies must increase payrolls by about 100,000 people every month to keep pace with population growth.

Still, Joel Prakken, senior managing director at Macroeconomic Advisers, a forecasting firm, said that the benefits of creating more than half a million jobs next year should not be minimized. “It’s going to make the unemployment rate lower than it otherwise would be,” he said.

Like the ad that says "Nine out of ten dentists agree," the one naysayer I find is conservative polemist Douglas Holtz-Eakin, who in my opinion is not worth wasting your time on. Obama's Jobs Speech Long On Promises, Weak On Substance | Fox News (but of course).

UPDATE: Economists mostly like Obama jobs plan:

A tentative thumbs-up.

That's the assessment from economists, who have offered mainly positive reviews of President Obama's $447 billion plan to stimulate job creation.

Some predict it would put hundreds of thousands of people back to work next year, mainly because a Social Security tax cut for workers would be deepened and extended to small businesses.

"Payroll tax cuts are very powerful," says Allen Sinai, chief economist of Decision Economics. "They provide a boost to direct income and, in turn, spending, which is important to growth."

Mark Zandi, chief economist at Moody's Analytics, estimates that the president's plan would boost economic growth by 2 percentage points, add 2 million jobs and reduce unemployment by a full percentage point next year compared with existing law.

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"Something like this is much needed" for an economy grappling with 9.1 percent unemployment, Zandi says. "The economy is on the edge of recession."

Susan Wachter, a finance professor at the University of Pennsylvania's Wharton School, figures that the Social Security tax cuts alone would add 1 percentage point to economic growth and create 1 million jobs next year.

Michael Hanson, a senior economist at Bank of America Merrill Lynch and a former Federal Reserve economist, predicts similar benefits. He thinks the additional jobs would lower the unemployment rate by nearly half a percentage point in 2012.

Such improvement, while just a start, could put the economy back on a "recovery path," Hanson says.

"You'd see a notable reduction in the likelihood that we would slip into another recession," he says.