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Obama's recovery plan not a hit with economists

ABJ Sep 8 - U.S. President Barack Obama's proposal to jolt a stalled economic recovery with $180 billion worth of tax breaks and transportation projects left economists largely unimpressed.

"I don't think they're game-changers," said Mark Zandi, Chief Economist at Moody's Analytics. "I don't think they're going to add up to a lot of new jobs."

The Obama administration plans to spark economic growth by allowing businesses deduct to from their tax bills up to 100 per cent, up from 50 per cent, of what is invested in new equipment through 2011. The deduction would give businesses $200 billion up front, but would cost the Treasury only $30 billion over the next decade because businesses would gradually write off the equipment value.

"Corporations are sitting on over a trillion dollars in cash," said Chuck Marr, Director of Federal Tax Policy at the Liberal Center on Budget and Policy Priorities. "This is an attempt to get them off the dime and start investing."

 

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