WASHINGTON (Reuters)-the jobs of President Barack Obama package could lift economic growth by one to three percentage points in 2012, add more than one million jobs and reduce the unemployment rate at least half a percentage point, judging by initial estimates.
Not exactly he can deliver the "jolt" Obama said in his speech to Congress Thursday night, but it would be enough to make a difference.
The basic idea is to give sufficient impetus to get recovery stop on the hunchback where families, banks and businesses have paid more than their debt loads and regained the confidence to start spending, loans and hire again.
Once demand picks up, the private sector will kick in and start hiring, and tax the props may disappear.
He would deliver economic medicine prescribed in recent weeks by Federal Reserve Chairman Ben Bernanke and the International Monetary Fund to prevent a worrying slowdown in global economic growth into recession.
Treasury Secretary Timothy Geithner also ensure their officials finance partners in the G7 meeting of leading industrial Nations in Marseille on Friday the United States is pulling its weight.
The wild card is of course if a Republican dominated House of representatives will agree with the complete package of $ $447 billion, a prospect unlikely given his criticisms that the stimulus program $ $830 billion in February 2009 was unable to deliver the takeoff of the economy and added to the huge budget deficit.
The American economy is so 2007 scars implosion of the housing credit, the bank failures resulted in 2008 and the deepest recession in 70 years that he's taking a long time to recover and create jobs.
"What you come up is that there is no silver bullet, no magic formula that this President or any person may propose that would bring unemployment below 5% next year," said Joel Prakken, Macroeconomic Advisers Chairman, economic modeling firm in St. Louis.
"He has to come from the private sector and for which you have to work with the slack with the housing crisis is repress aggregate demand," he said.
This suggests that the programme of work of Obama, that would probably serve as a palliative, not a cure, leaving room for the Federal Reserve provide more monetary stimulus to prevent the economy returned to fall out of recession.
BUILD AMERICA
Analysts in the Capital Economics estimated that the Obama plan is equivalent to 3% of GDP of the United States and must be sufficient to significantly increase the growth of 2012 if fully passed by Congress.
The biggest single impetus could come from a reduction of $ 250 billion in payroll taxes. Obama proposes to extend an existing 2 percent cut in payroll tax and increase its size to 3.1% for employees and adding a hack for employers.
"These reductions in payroll taxes are the proposals that have the greatest chance of being approved by Congress because it will be more difficult for Republicans to vote against the proposed tax cuts," said Paul Ashworth, Chief Economist of the U.S. economy of the Capital.
Tax cuts could add as much as $ 375 billion in economic output for the u.s. economy of $ 14 trillion, based on Congressional Budget Office estimated in August, the economic impact that fiscal stimulus programs can have on GDP.
But not all that would be money new impetus, since a cut payroll taxes of $ $112 billion is already in force and would simply be extended. In addition, the overall impact could be reduced because it does not target lower income workers.
"Gives money disproportionately people at the top of the income scale. Higher income individuals are more likely to save money, they don't need to spend it in essence, therefore, the actual impact is minor, "said Roberton Williams, senior fellow centrist Brookings Center for urban policy-tax.
Macroeconomic Advisers still estimated that the payroll tax of 2 percent cut extension alone would add 400,000 jobs and increase GDP in 2012 at 0.5%. The largest sum may increase that to about 0.7% GDP and 600,000 jobs.
The second largest in terms of Obama is US $ 105 billion in infrastructure investments, which could add as much as $ 262 billion for the economy, based on the CBO numbers.
Macroeconomic Advisers estimates that could create about 150,000 new jobs in the first year and add more than half a million jobs in three years-good news but small for an economy that usually generates more than two million jobs per year when in good health.
The challenge would also find "shovel-ready" projects where the highways, railroads, or renovation of school plans are on the drawing board is awaiting funding. Otherwise it can take years for major construction projects underway.
Extending unemployment benefits, which total US $ 49 billion in Obama's plan, also has a significant impact. He could add up to US $ 102 billion to the economy. Macroeconomic estimates of advisers would add 0.25% growth of GDP in 2012 and create 200,000 new jobs, putting more money in the pockets of consumers.
Economists were re-run computer models at the end of Thursday night to update your data. Based on a stimulus package of $ 300 billion less than Obama revealed, Ian Shepherdson, Us Economist at high frequency economics, had estimated an increase of 1.3% to GDP and 1.7 million jobs over the life of the programmes.
His initial reaction was if it were adopted in full, that is rather unlikely, the plan would reduce the rate of unemployment 9.1 per cent to 8 per cent in 2012 and give a welcome boost to an economy which grew at an annual rate of 1 percent in the second quarter. But is does not guarantee a solid recovery.
"This is going to be more than a panacea for our problems? It's hard to say, "said Williams. "This crisis has been deeper and longer than anything we've seen since the late 1930 and totally do not understand it. What we do know is that what we did in 2009 was not large enough. "
(Editing by Mary Milliken and Philip Barbara)
