Economists: Obama’s plan would work (if it passes)

President Obama delivered an awfully good speech last night, and a closer look at the plan itself suggests the American Jobs Act is at least as good as the rhetoric. If we stick to a naive fantasy world in which responsible policymaking is still possible, what kind of effect could we expect from this economic package? Economists have begun weighing in — and they’re generally impressed.

A tentative thumbs-up. That was the assessment Thursday night from economists who offered mainly positive reviews of President Barack Obama’s $450 billion plan to stimulate job creation.

Some predicted it would put hundreds of thousands of people back to work next year, mainly because a Social Security tax cut for workers would be deepened and extended to small businesses. […]

Mark Zandi, chief economist at Moody’s Analytics, estimated that the president’s plan would boost economic growth by 2 percentage points, add 2 million jobs and reduce unemployment by a full percentage point next year compared with existing law.

Gene Sperling, the director of the White House’s National Economic Council, appeared on MSNBC this morning and agreed with the Moody’s Analytics analysis, adding that the Americans Jobs Act would likely lower the unemployment rate to 8%, and possibly even lower. The Economic Policy Institute was also impressed, and would expect to see massive economic gains.

Macroeconomic Advisers wasn’t quite as optimistic, but its analysis projected that the White House plan “would give a significant boost to GDP and employment over the near-term.” The firm would expect to see the proposal create at least 1.3 million jobs.

There are reasonable questions as to whether congressional Republicans even want to improve the economy at all, but if lawmakers have any interest in creating jobs and boosting growth, the American Jobs Act would work. It’s not everything I could have asked for, but it’s an ambitious solution to a pressing problem that would a big difference.