Obama’s proposed bill would fail to create enough jobs, say analysts
Business analysts suggest that even if the U.S. Congress passes Obama’s much-anticipated bill for jobs and tax plan enactment, the stubborn unemployment rates are most likely to rule state economy for the next three years.
Economists suggest that if Obama’s proposed bill creates 1.9 million new jobs the in the state, the bill would still fail to reach 6 percent unemployment figures which persisted before the recession.
Pre-recessionary job rates hard to achieve
The current U.S. unemployment level is 9.1 percent and the White House bill promises to bring it back to prerecession level which is around 3 percent less than the current figures.
But the current 14 million unemployed and 25 million part-time employeds put a real challenge in front of the administration, predict economists.
As of now the democrats have maintained that by 2012 - U.S. presidential election year - White House would only be able to reduce unemployment rates by one percent, to keep it at 8 percent.
Obama’s American Job Act to fall short of prospects
Mark Zandi, chief economist of Moody's Analytics predicted that Obama’s American Job Act would create 1.9 million new jobs, which is merely a one percent drop from the current jobless rates. The Act would also increase U.S. Gross Domestic Product (GDP) only by 2 percent, he calculated.
Zandi asserted said that his calculation is based on hypothesis that the entre bill - as currently proposed - is passed by the congress with the same budgetary policy by the end of the year 2011.
In the words of Zandi, "I assumed that it would be paid for… I didn't know when I did that simulation how the President proposed to pay for it."
Amid all hypothetical predictions, the fact remains that the U.S. economy merely produced 20,000 fresh jobs in June, while 85,000 in July and strangely none in the month of August. At the same time, nation’s GDP has also been rising at a meager rate of below 1 percent.