Part of a Series
The jobs bill President Barack Obama delivered this week to Congress will create nearly 2 million new U.S. jobs by doing what presidents and legislatures across the political spectrum have routinely done in times of labor market weakness: Enact short-term, temporary spending programs that have bipartisan support and are proven to work.
Roosevelt did it. Eisenhower did it. So did Kennedy, Johnson, and George W. Bush. And each time, these short-term fiscal expansions worked as intended, generating more economic activity than they cost, putting people to work, and making the country stronger.
That’s why a sweeping consensus of economists and forecasters across the political divide now call for the government to forcefully intervene in precisely this way, to create demand for goods and services, which will in turn boost hiring and business growth. And that’s exactly what the American Jobs Act will do, experts say:
- The bill will add 1.9 million jobs next year, shaving a full percentage point from the unemployment rate, according to Mark Zandi, chief economist at Moody’s Analytics.
- It will boost U.S. gross domestic product by 1.3 percent in 2012, giving “a significant boost to GDP and employment over the near term,” according to Macroeconomic Advisers, LLC, among the most closely followed forecasters in the country.
- Goldman Sachs said the positive effect would be even higher than that, increasing GDP by 1.5 percent in 2012.
The American Jobs Act, a $447 billion job-creation plan, attacks unemployment in three primary ways. It prevents layoffs and puts people to work building roads, bridges, and schools. It cuts taxes to spur consumer spending and small business hiring. And it maintains a safety net for Americans most hurt by the economic downturn.
For more on this topic, please see:
- The American Jobs Act by Heather Boushey and Gadi Dechter