GOP spending plan would cost 700,000 jobs, new report says
By Lori Montgomery
Washington Post Staff Writer
Monday, February 28, 2011
A Republican plan to sharply cut federal spending this year would destroy 700,000 jobs through 2012, according to an independent economic analysis set for release Monday.
The report, by Moody's Analytics chief economist Mark Zandi, offers fresh ammunition to Democrats seeking block the Republican plan, which would terminate dozens of programs and slash federal appropriations by $61 billion over the next seven months.
Zandi, an architect of the 2009 stimulus package who has advised both political parties, predicts that the GOP package would reduce economic growth by 0.5 percentage points this year, and by 0.2 percentage points in 2012, resulting in 700,000 fewer jobs by the end of next year.
His report comes on the heels of a similar analysis last week by the investment bank Goldman Sachs, which predicted that the Republican spending cuts would cause even greater damage to the economy, slowing growth by as much as 2 percentage points in the second and third quarters of this year.
Republicans have dismissed both reports, calling them the product of the same flawed economic thinking that produced President Obama's $814 billion stimulus package -- a bill that Democrats argued would keep unemployment below 8 percent. In fact, the unemployment rate has hovered at or above 9 percent for nearly two years.
(More here.)
Washington Post Staff Writer
Monday, February 28, 2011
A Republican plan to sharply cut federal spending this year would destroy 700,000 jobs through 2012, according to an independent economic analysis set for release Monday.
The report, by Moody's Analytics chief economist Mark Zandi, offers fresh ammunition to Democrats seeking block the Republican plan, which would terminate dozens of programs and slash federal appropriations by $61 billion over the next seven months.
Zandi, an architect of the 2009 stimulus package who has advised both political parties, predicts that the GOP package would reduce economic growth by 0.5 percentage points this year, and by 0.2 percentage points in 2012, resulting in 700,000 fewer jobs by the end of next year.
His report comes on the heels of a similar analysis last week by the investment bank Goldman Sachs, which predicted that the Republican spending cuts would cause even greater damage to the economy, slowing growth by as much as 2 percentage points in the second and third quarters of this year.
Republicans have dismissed both reports, calling them the product of the same flawed economic thinking that produced President Obama's $814 billion stimulus package -- a bill that Democrats argued would keep unemployment below 8 percent. In fact, the unemployment rate has hovered at or above 9 percent for nearly two years.
(More here.)
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