Unemployment was arguably the most important issue of the 2010 midterm campaign. Voters were frustrated with it. Republicans promised to reduce it.
But Mark Zandi, the economist from Moody's, says the Republican plan to slash $60 billion in federal spending between now and the end of the fiscal year would have the very opposite effect: It would result in 700,000 fewer jobs. In other words, unemployment would be even higher if the Republican spending plan becomes law.
Here's the scoop, via the Washington Post's Lori Montgomery:
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. ...
"Significant government spending restraint is vital, but given the still halting economic recovery, it would be counterproductive for that restraint to begin until the economy is creating enough jobs to bring down the still very high unemployment rate," Zandi writes.
I can't vouch for these numbers and Zandi, who used to advise John McCain, is now the Democrats' favorite economist to cite. But that's largely because Democrats are making an argument that mainstream economists like Zandi happen to support: In the midst of such a weak economic recovery, less government spending is almost certainly going to mean fewer jobs.