President-elect Barack Obama recently stated that his stimulus proposal could save or create as many as 4 MM US jobs by 2010, nearly 90% of them in the private sector. Obama previously estimated that his estimated US$800B strategy to pull the US economy out of its year-long recession could save or create 3 MM jobs, but his new study has found that the actual number would range between 3 million and 4 million. The analysis was submitted by Christina Romer, head of Obama’s council of economic advisors, and Jared Bernstein, the economic adviser to Vice President-elect Joe Biden. The analysis directly follows an official government report showing that US employers slashed more than 500K jobs in December 2008, pushing the US unemployment rate to 7.2% and bringing the number of jobs lost in the US last year to 2.6MM, the worst since 1945. “The jobs we create will be in businesses large and small across a wide range of industries,” President-elect Obama said on his weekly radio and Internet address. “And they’ll be the kind of jobs that don’t just put people to work in the short term, but position our economy to lead the world in the long term.”
Federal Reserve Chairman Ben Bernanke said that the stimulus package being crafted by President-elect Barack Obama and Congress could provide a “significant boost” to the sinking economy. But he warned that such a recovery won’t last unless other steps are taken to stabilize the shaky financial system.
Although Bernanke has previously endorsed the notion for a fresh round of government stimulus to lift the country out of a recession, it marked the first time the Fed chief has referenced the roughly US$800B recovery plan now being worked on by Obama, who takes office next week. Obama envisions a blend of tax cuts and increased government spending, including on big public works projects, to make up the stimulus plan.
Bernanke, who didn’t weigh in on the details of the evolving package, made clear that such a recovery plan was needed as part of a broader, multi-pronged government response to combat the worst financial crisis to hit the U.S. and the global economy since the 1930s.
The world view: President-elect Barack Obama has unveiled his recovery plan for the US Economy as if the policies of the rest of the world had no bearing on the fate of the US. His POV is that a large US fiscal stimulus policy will be enough to restore prosperity. The world’s economy needs more that a US stimulus, as the problems are much deeper and global than the US alone.
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