By: Jon Walker Monday February 28, 2011 3:51 pm |
The House Republicans’ proposed cuts are part of a war on jobs, and today, fresh on the heels of the analysis by Goldman Sachs, we have another independent economic analysis (PDF) to verify it. According to Mark Zandi, chief economist at Moody’s Analytics, the specific cuts pursued by the GOP would result in 700,000 fewer jobs. From Washington Post:
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.
President Obama’s re-election is going to hinge on the top issue with voters and that is jobs and the economy. Seven hundred thousand jobs can easily be the difference between Obama winning a close election thanks to a steadily recovering economy with official unemployment dropping to 7.9 percent by November 2012, and Obama losing because the economy seems to have effectively stalled with unemployment at 8.4 percent. It is no wonder that Republicans always seem to undergo a sudden anti-deficit revival that necessitates immediate cuts whenever a Democrat is in the White House.
I understand some in the Obama administration thought it was important for voters to see him as being “serious” about the federal debt by playing to the Republicans’ deficit hysteria rhetoric, but the loss of hundreds of thousands of jobs is going to be far more destructive to his re-election prospects than opinions about relative deficit seriousness. By playing to their rhetoric, we aren’t having a debate between cuts and pro-jobs legislation, just a debate about how big and how destructive the cuts should be.
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