Economists’ Opinions on Obama’s Jobs Proposal

From the WSJ’s Real Time Economics blog, dated Sept 8 with a follow up on Sept 9.

A few thoughts:

  1. There is a diversity of opinion here: from a lot of “bang for the buck” (Krugman) to “not a lot of bang for the buck” (Porcelli). One thinks it will have minimal impact because it mainly “averts a spending reduction rather than creating new spending” (Resler), while another (Shierholz) thinks it “would boost employment by around 4.3 million jobs (yes, 1.6 million of those jobs would come from continuing temporary policies that are already in place and supporting the economy today, but the new initiatives alone would generate 2.6 million jobs).” Regardless, it shows that there isn’t the consensus amongst economists that either side claims. At least not on this topic.
  2. No one thinks it will be easy to pass. It is just a proposal, and one that needs to survive the legislative process. The final version, if there is one, will be different. If economic improvement is not seen, and it probably won’t be, President Obama will (be able to) argue that had his jobs proposal been passed as is, things would have gotten better.
  3. I am always skeptical when reading the forecasts of economists. I agree with Nassim Nicholas Taleb: forecasters should always be asked what their previous predictions were and how accurate they proved to be. Many of these economists would be humbled if forced to do so, or at least would make less exact and confident predictions.

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