Economists Say Republican Jobs Package Won’t Create Jobs in Short Term

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For close to a year now, John Boehner, the House Speaker, and Eric Cantor, House Majority Leader, have touted their jobs package as often as they can. The jobs package is mentioned during speeches, press events and whenever they are talking about the economy.

“President [Barack] Obama and Democrats here in Congress have shown us what doesn’t work: more government, more spending, more taxes don’t create more jobs,” Boehner said during a weekly briefing. “We’ve passed more than 30 jobs bills, including bipartisan bills expanding energy production and projects like the Keystone pipeline.”

  

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In a statement, Cantor encouraged Democrats to agree with the Republican plan. The statement said, “House Republicans are committed to bold, pro-growth policies and have passed dozens of bills to create jobs. We’ve begun to right the ship, but we will not be able to achieve long-term growth without willing partners in the White House and Senate.”

The jobs package from the Republicans has 32 bills in it but analysts are saying that it does not create jobs. The Huffington Post conducted interviews with economists about the jobs package, most of whom said that the package will not have an effect on job creation in the short term.

“A lot of these things are laughable in terms of a jobs plan that would produce noticeable improvements across the country in the availability of employment in the next four or five years,” said Gary Burtless, a senior economist at Brookings. “Even in the long run, if they have any effect all, it would be extremely marginal, relative to the jobs deficit we currently have.”

The chief economist for Moody’s Analytics, Mark Zandi, said, “These kind of changes will matter over a period of three to five years. It takes that long before businesses can digest changes and respond to them. For it to show up in a meaningful way in the natural economy, you can make specific changes that could affect a specific industry or a few companies, but it’s not going to make a big difference in terms of the monthly job numbers. It takes some very significant changes across lots of different industries to really make a big difference.”

A senior economist from Deutsche Bank, Carl Riccadonna, said, “They are very narrowly targeted, and it gives the impression that maybe some of this is special interest really pursuing these, not really taking a macro view but a very, very micro focus in what the impact would be.”

The main segment of the jobs package revolves around pushing back regulations while also changing environmental laws in an effort to increase job growth. The economists that the Huffington Post spoke to said that regulation does not have a major impact on the country’s unemployment rate. The Bureau of Labor Statistics has data that backs this claim. Less than 16,000 jobs, 0.4 percent, disappeared as a result of “government regulations/intervention.”

“It’s just hard to believe that the paperwork requirements to starting a business represent a major impediment to starting businesses right now,” Burtless said. “That’s not why we had lots more business creation in the late ’90s.”