Tags: zandi | stimulus | warning

Economist Zandi: One Stimulus Bill Not Enough

Wednesday, 11 Mar 2009 07:00 AM

President Barack Obama's pledge to create or save 3.5 million jobs through a massive government spending plan, will fall short of its target, lawmakers have been warned.

President Obama has repeatedly claimed the recent 787-billion-dollar stimulus package would create or save in the region of 3.5 million jobs in two years, 90 percent of which would be in public sector.

That was put into doubt by economists testifying before Congress on Tuesday.

"Our studies show that over the first two years, about 2.5 million jobs will be created," Allen Sinai of Decision Economics told to Congressional leaders.

"That's a little less than what the administration and perhaps (House of Representative's) Speaker (Nancy) Pelosi had said," he added.

Citing three years as a more reasonable time frame, Sinai said "nobody should expect miracles, quick results, what's going on can't change overnight."

Supporters of the spending plan had called for its rapid passage through Congress, so that its economic impact could be felt.

Economists also told members of the House of Representatives that another round of spending would likely be needed.

Mark Zandi, the chief economist for Moody's Economy.com warned: "I think another stimulus package is a reasonable probability the way things are going.

"I think policy makers need to do more. We're not done yet."

The Democrat-dominated Congress passed the the stimulus package in February, with only token Republican support.

Since then there has been growing criticism that government spending will spell rising inflation and ballooning deficits in the long-term.

© 2009 Agence France Presse. All rights reserved.

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President Barack Obama's pledge to create or save 3.5 million jobs through a massive government spending plan, will fall short of its target, lawmakers have been warned.President Obama has repeatedly claimed the recent 787-billion-dollar stimulus package would create or...
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