Archive for Sunday, January 11, 2009

Obama advisers: Plan would create up to 4.1M jobs

January 11, 2009


— President-elect Barack Obama countered critics with an analysis Saturday by his economic team showing that a program of tax cuts and spending like he’s proposed would create up to 4.1 million jobs, far more than the 3 million he has insisted are needed to lift the country from recession.

Congressional Republicans reacted skeptically, just as Obama acknowledged that he would be forced to recant some of his campaign promises given the economic crisis facing the country. Even the president-elect’s own economists acknowledged their two-year estimates could be wrong.

The 14-page analysis, which was posted online, says estimates are “subject to significant margins of error” — because of the assumptions that went into the economic models and because it is not known what might pass Congress.

“These numbers are a stark reminder that we simply cannot continue on our current path,” Obama said in his weekly radio and YouTube broadcast address.

“If nothing is done, economists from across the spectrum tell us that this recession could linger for years and the unemployment rate could reach double digits — and they warn that our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world,” he said.

Obama has provided few details of his $775 billion plan so far. This fresh report does not include the specific construction of his tax cuts, the amounts dedicated to state aid or public works — key questions that Obama aides have closely held.

On Saturday, economic aides and advisers declined to lay out even rough estimates for the plan’s components. They said they worked with broad instructions from Obama but didn’t want to limit negotiations with congressional leaders by outlining their limits in public.

“I want to be realistic here. Not everything that we talked about during the campaign are we going to be able to do on the pace we had hoped,” Obama told ABC’s “This Week” for an interview set to air today.

For a second time since his election, Obama increased the number of jobs his jobs program would create, taking the number to as many as 4.1 million jobs saved or created — a benchmark his critics charge cannot be measured. During the campaign, he promised only 1 million new jobs.

The analysis came out one day after news the unemployment rate had jumped to 7.2 percent, the highest in 16 years. The nation lost 524,000 jobs in December, bringing the total job loss for last year to 2.6 million, the largest since World War II.

GOP lawmakers have insisted on carefully targeting any aid and on a politically popular tax cut for the middle class, as well as loans to states.

“We want to make sure it’s not just a trillion-dollar spending bill, but something that actually can reach the goal that he has suggested,” said Sen. Mitch McConnell of Kentucky, the Senate’s top Republican.

Obama’s plan has met with lukewarm support from lawmakers in general, despite economic news that has dominated the new administration even before it begins.


jmadison 9 years, 4 months ago

Government policy has been a major contributor to the economic downturn with its contribution to the housing bubble and its burst aftermath. Bush will be gone, but Sen. Dodd(the senator from Fannie Mae and Freddie Mac), Cong. Barney Frank(representing Fannie Mae and Freddie Mac), will still be in charge of committees that will distribute a significant amount of the funny money that will be printed.Perhaps we will all become wards of the state similar to the financial and auto industries.

Godot 9 years, 4 months ago

The success of this entire plan rests on the assumption that the Federal Reserve will be able to keep interest rates at zero percent for the next 8 years, and that foreign governments and institutional investors will continue to lend us at least $1 trillion dollars per year ror the next several years (by buying treasuries) for a return of zero per cent.That might happen, just like there might be fairies, elves, Big Foot, and a flying spaghetti monster.If that doesn't happen, then what? The "plan" does not offer an alternative. That is because the alternative is failure.

Commenting has been disabled for this item.