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Obama Plan Would Boost GDP, Economists Say(edited)

Tettsuo

Tettsuo

Compassion is Strength
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The cost of inaction is much greater than the cost of action.

Obama Plan Would Boost GDP, Economists Say - Bloomberg

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, Pennsylvania. “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.
Government spending 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 said.
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So if the option is to simply cut services then wait and see, we're in for a long cold recession, but if we act it could improve things across the board.
 
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Re: Obama's Plan is the Right Way to Go

we have been discussing this in another thread and I just want to get my stance on this clear - I would hope that Congress would pass the entire Obama plan as he described it last night. The nation needs it. However, I fear that the GOP will only extract from it the planks that Obama included as part of the compromise with them top get their support and will dump everything else that Obama and the Dems want. They will then claim that they did give the President some of what he requested and thus did indeed compromise. And Obama will be outmaneuvered yet again by the Republicans.
 
Re: Obama's Plan is the Right Way to Go

There are problems with it; namely that it might not be big enough, and that it draws money from underfunded programs. However, it's a better plan than doing nothing or deregulating again and again and hoping that corporations will start hiring quickly enough on their own.
 
Re: Obama's Plan is the Right Way to Go

If it raises the GDP, it's as best a temporary thing with drags on the economy to follow. Indeed cutting what we pay in to S.S. will perhaps allow people to spend a little more. But then S.S. goes even further in debt which then has to be made up somehow.

Bernanke notes that the drag is high energy prices (caused by his inflationary QE programs) and debt. (Even a blind squirrel finds an occasional acorn). Nothing here addresses either of those problems.
 
Re: Obama's Plan is the Right Way to Go

printing money is definitely not the way out of this. i'm not a fan of Bernanke's QE.

energy is the lifeblood of the economy, and we definitely need a new domestic energy policy. it should be treated as a top national priority.
 
Re: Obama's Plan is the Right Way to Go

BREAKING: Obama Plan Would Not Boost GDP, Other Economists Say
 
Re: Obama's Plan is the Right Way to Go

Who cares if it raises GDP? The first stimulus raised GDP to an astronomical amount of almost 6% growth and where did that get us? In fact, government spending is apart of GDP. If the government spends more, then it will automatically increase GDP even if it doesn't add any economic values.

Additionally, we have been implementing these tax cuts for quite awhile now and at what results? The only potential positive spending I see is on infrastructure and transportation. As for school renovation, that is not the federal government's role. It is a town, city, and state role.
 
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Re: Obama's Plan is the Right Way to Go

I'm curious as to the reason why Obama and the democrats continue to use the pro-tax hike speeches of wealthy patrons such as Buffet and King. Obama said in his speech that Buffet is outraged that he doesn't pay more.

It doesn't take a genius to realize Buffet could easily pay more out of his own pocket, by not claiming any deductions and by donating to Treasury Direct. Every wealthy person in the country who believes so strongly that tax hikes for the wealthy should increase are casting themselves as hypocrites. If they want to pay more, they can pay more. Period.
 
Re: Obama's Plan is the Right Way to Go

haymarket said:
we have been discussing this in another thread and I just want to get my stance on this clear - I would hope that Congress would pass the entire Obama plan as he described it last night. The nation needs it. However, I fear that the GOP will only extract from it the planks that Obama included as part of the compromise with them top get their support and will dump everything else that Obama and the Dems want. They will then claim that they did give the President some of what he requested and thus did indeed compromise. And Obama will be outmaneuvered yet again by the Republicans.
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None of this half a trillion goes to fix any of America's long term economic challenges. This seems like another payout to make numbers look a little better while he is running for re-election. If this was a republican plan you would call it shameful politics, but because it is called for by the your party's head you are all for it.

How does this fix the economic woes in your state long term? You know very well it does not. Fix the foreclosure mess that impacts about 15% of our economy, fix our competitive stance so companies want to source jobs here versus Asia, put in a smart grid that is a long term fix to energy costs, find ways to use our natural gas reserves so we can import less oil.

Won't you ever get tired of the "sugar high" temp fixes that both Bush and Obama have employed.
 
From the article at the beginning of this thread:

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.
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In other words, the proposals, once drafted into legislation, would amount to a low multiplier stimulus. $447 billion is almost 3% of GDP (2011 Q2 figure). If the program would increase GDP by 2%, then the overall multiplier is about 0.7. Given its structure and past CBO assessments of multipliers tied to various spending/tax provisions, a multiplier lower than 1.0 appears reasonable.
 
donsutherland1 said:
From the article at the beginning of this thread:



In other words, the proposals, once drafted into legislation, would amount to a low multiplier stimulus. $447 billion is almost 3% of GDP (2011 Q2 figure). If the program would increase GDP by 2%, then the overall multiplier is about 0.7. Given its structure and past CBO assessments of multipliers tied to various spending/tax provisions, a multiplier lower than 1.0 appears reasonable.
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That also assumes all the money can be spent in 2012 which is unlikely. Further it does not mention that this "stimulus" would be for 2012, thus there would be an offsetting contraction in 2013 unless it is continued. That is what we are now seeing as the 2009 package is coming to an end.
 
Re: Obama's Plan is the Right Way to Go

haymarket said:
we have been discussing this in another thread and I just want to get my stance on this clear - I would hope that Congress would pass the entire Obama plan as he described it last night. The nation needs it. However, I fear that the GOP will only extract from it the planks that Obama included as part of the compromise with them top get their support and will dump everything else that Obama and the Dems want. They will then claim that they did give the President some of what he requested and thus did indeed compromise. And Obama will be outmaneuvered yet again by the Republicans.
Click to expand...

So tax cuts now create economic growth but only when presented by a liberal President? Interesting contradiction on the part of liberals. Then there are these tax cuts, cuts in FICA which funds a current underfunded SS fund. That is the plan you want passed in its entirety? More spending and less tax revenue, but only less SS/Medicare revenue? Wow, amazing how Obama can brainwash liberals!
 
Re: Obama's Plan is the Right Way to Go

1Perry said:
If it raises the GDP, it's as best a temporary thing with drags on the economy to follow. Indeed cutting what we pay in to S.S. will perhaps allow people to spend a little more. But then S.S. goes even further in debt which then has to be made up somehow.

Bernanke notes that the drag is high energy prices (caused by his inflationary QE programs) and debt. (Even a blind squirrel finds an occasional acorn). Nothing here addresses either of those problems.
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Take the hint, folks.

Bernanke says high energy prices are in part a drag on the economy, get ready for the Keystone XL pipeline to be approved.
 
cpwill said:
more importantly, why do people still listen to such discredited sources?


here's one that might have a bit more - you know - actual impact:

Employers Say Obama Jobs Plan Won't Spur Hiring

woops? :)
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It's a good article, but it doesn't exude such gloom and doom as you'd like readers to believe.

There are mixed reactions to the President's jobs proposal. Some employers say the plan could work for them, others are 50/50 and still others say it won't help them one bit. But what you gleen from the article is this: At least employers are thinking of ways the plan could work for them. At least employers recognize that the plan would work best in certain industries, i.e., construction, pharmaceuticals, health care, education. At least employers are saying the see some merit to the President's jobs proposal. It may not put 8,000,000 people back to work but it it can take even 1/4 of the unemployed or under-employed off the federal dole and increase GDP, I can get behind that.
 
Re: Obama's Plan is the Right Way to Go

Conservative said:
So tax cuts now create economic growth but only when presented by a liberal President? Interesting contradiction on the part of liberals. Then there are these tax cuts, cuts in FICA which funds a current underfunded SS fund. That is the plan you want passed in its entirety? More spending and less tax revenue, but only less SS/Medicare revenue? Wow, amazing how Obama can brainwash liberals!
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No one has ever denied that tax cuts are stimulative. But it is one thing to use them for short-term stimulus and another thing entirely to employ them long-term without paying for them.

It's also true that tax cuts aren't the most effective form of stimulus, but they are most likely the only form of stimulus that republicans will support.
 
Re: Obama's Plan is the Right Way to Go

Conservative said:
So tax cuts now create economic growth but only when presented by a liberal President? Interesting contradiction on the part of liberals. Then there are these tax cuts, cuts in FICA which funds a current underfunded SS fund. That is the plan you want passed in its entirety? More spending and less tax revenue, but only less SS/Medicare revenue? Wow, amazing how Obama can brainwash liberals!
Click to expand...

Wasn't it yourself and others who taunted "the multiplier effect" on the economy when more people are working you have more people not only generating more income tax revenue but also paying into SS?

Wasn't it yourself and others who said tax cuts generate job growth?

Wasn't it yourself and others who claimed that if you allow businesses and business owners to keep more of what they earn they'll put that money back into their business to grow and expand their business?

You can't have it both ways, Conservative.
 
Re: Obama's Plan is the Right Way to Go

AdamT said:
No one has ever denied that tax cuts are stimulative. But it is one thing to use them for short-term stimulus and another thing entirely to employ them long-term without paying for them.

It's also true that tax cuts aren't the most effective form of stimulus, but they are most likely the only form of stimulus that republicans will support.
Click to expand...

Are you telling me that cutting SS/Medicare taxes are the answer? why would you support taking more funds from an underfunded program that is designed to provide a retirement supplement to you but not the Bush tax cuts which didn't hurt SS/Medicare funding? Tax cuts always put more money into people's hands which is a good thing, the problem with this one is that it taxes money from the underfunded entitlement programs yet you have no problem with it?

All these years of railing against the Bush taxes cuts but now having no problem with cutting SS/Medicare? That is partisan bs.
 
Tettsuo said:
The cost of inaction is much greater than the cost of action.
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Not necessarily. If the action is ineffective and a waste of money when you're broke and in debt then inaction isn't actually costly at all.

Obama Plan Would Boost GDP, Economists Say - Bloomberg

So if the option is to simply cut services then wait and see, we're in for a long cold recession, but if we act it could improve things across the board.
Click to expand...

Google the words "Economists say stimulus would boost the economy" and see what predictions the Krugman psychics said before that never came true. Then see what foolishness was their excuse... "We needed more stimulus," you see we're so deep in a hole that digging faster might keep us from noticing whats going on.
 
Re: Obama's Plan is the Right Way to Go

Conservative said:
Are you telling me that cutting SS/Medicare taxes are the answer? why would you support taking more funds from an underfunded program that is designed to provide a retirement supplement to you but not the Bush tax cuts which didn't hurt SS/Medicare funding? Tax cuts always put more money into people's hands which is a good thing, the problem with this one is that it taxes money from the underfunded entitlement programs yet you have no problem with it?

All these years of railing against the Bush taxes cuts but now having no problem with cutting SS/Medicare? That is partisan bs.
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It doesn't particularly matter where the tax cuts come from. As you've pointed out many times, the general fund is in debt to the SS trust fund. So why would it be better to pull revenue from the general fund? In either case we will have to borrow more to pay for the cuts.
 
Re: Obama's Plan is the Right Way to Go

Objective Voice said:
Wasn't it yourself and others who taunted "the multiplier effect" on the economy when more people are working you have more people not only generating more income tax revenue but also paying into SS?

Wasn't it yourself and others who said tax cuts generate job growth?

Wasn't it yourself and others who claimed that if you allow businesses and business owners to keep more of what they earn they'll put that money back into their business to grow and expand their business?

You can't have it both ways, Conservative.
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Nope, that was the resident economists in this group. More working people do however create more tax revenue as shown by history thus the Reagan and Bush tax RATE cuts. What makes this program different as we have had extension of unemployment and SS/Medicare tax cuts now for 2 1/2 years? Why will this one work whereas Stimulus One didn't?

Until Obama gets fired business has no confidence in this President as his SS/Medicare tax cuts are offset by regulations and the potential for higher taxes. I want a smaller Federal Govt. and lower personal income tax rates to stimulate growth, not cuts in SS/Medicare which are underfunded anyway
 
Lachean said:
Not necessarily. If the action is ineffective and a waste of money when you're broke and in debt then inaction isn't actually costly at all.



Google the words "Economists say stimulus would boost the economy" and see what predictions the Krugman psychics said before that never came true. Then see what foolishness was their excuse... "We needed more stimulus," you see we're so deep in a hole that digging faster might keep us from noticing whats going on.
Click to expand...

What Krugman said from the very beginning was that the stimulus was too small, and not the best form of stimulus. He was right.
 
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