President Barack Obama’s $447 billion jobs plan would boost U.S. gross domestic product by as much as 2 percent in 2012, say economists at Goldman Sachs Group Inc., Moody’s Analytics Inc. and JPMorgan Chase & Co.
“The plan would go a long way toward stabilizing confidence, forestalling another recession and jump-starting a self-sustaining economic expansion,” said Mark Zandi
, chief economist at Moody’s Analytics in West Chester
. “The U.S. is on the cusp of a recession” without action.
Obama’s proposal, which would increase infrastructure spending and cut in half payroll taxes paid by workers and small business owners, would raise next year’s gross domestic product by 2 percentage points, add 1.9 million jobs and cut the unemployment rate by one percentage point, Zandi said.
Putting Americans back to work is the focal point of the plan. Unemployment has hovered at about 9 percent or more for two years, damping consumer confidence
and spending. Payrolls unexpectedly stalled in August, a Labor Department report showed on Sept. 2.
Tax cuts account for more than half the dollar value of the plan, which includes a $105 billion in infrastructure spending for school modernization, transportation projects and rehabilitation of vacant properties. The proposal has $35 billion in direct aid to state and local governments to stem layoffs of educators and emergency personnel, according to a White House fact sheet.
and tax changes would add 0.1 percentage points to growth in 2012 under the plan, instead of a contraction of 1.7 percentage points under current law, JPMorgan chief U.S. economist Michael Feroli