Politics over Economics?

It looks as though the jobs bill proposed by Barack Obama will be killed by Senate Republicans.
Obama’s bill would help local governments stave off job cuts by infusing them with capital financed by a 5.6 percent surcharge on income exceeding $1 million.  The new income tax bracked is expected to raise more than $450 billion over the next decade. 

Esteemed economist Mark Zandi of Moody’s predicts that the stimulus would add 2 percentage points of GDP growth, add 1.9 million jobs, and cut the unemployment rate by a full percentage point.

However, Obama and many analysts believe that Republicans are blocking the measure for perceived self-serving purposes.

“This is not the time for the usual games or political gridlock in Washington,” declared Obama. “Any senator out there who’s thinking about voting against this jobs bill needs to explain why they would oppose something that we know would improve our economic situation.”

The vote on the bill comes as Federal Reserve chairman Ben Bernanke recently claimed that the recovery is “close to faltering”.  The bond market, which typically and accurately predicts recessions, indicates that the the economy has an approximate 60% chance of falling into recession within a year.

Last month, the Organization for Economic Cooperation and Development (OECD) reduced its expectations for economic growth.

Most analysts believe that a recession would increase the likelihood that Republicans retake the White House in 2012.

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