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Is jobs package enough to grow, or just prevent recession?
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Jeremy Hobson: Now let’s get to the President’s jobs plan. He’ll be in Richmond, Va. today, drumming up support for the $450 billion package, which is a mixture of tax breaks, infrastructure spending and the extension of unemployment benefits.
Let’s talk about the plan now with Chris Low. He’s chief economist with FTN Financial, and he’s with us live from New York as he is every Friday. Good morning.
Chris Low: Good morning.
Hobson: Well Chris, what do you think is the most useful thing in the president’s jobs package when it comes to creating jobs?
Low: Yeah, well, as far as getting the economy going, the two biggest things are the extension of the payroll tax cut; and then also a little bit that was mentioned in the speech but not in the formal package delivered to Congress, which would be a plan allowing almost universal refinancing of mortgages at today’s current low rate — something that would be worth about $90 billion a year.
Hobson: So in other words, fixing the housing market to fix the job market. Chris, do you think that if this package is passed as is — which I know is a big if — that it would actually spur some real growth, or just keep us out of another recession?
Low: No. Look, I think what we’re talking about here is something that would keep us out of a recession. It’s a $14 trillion economy, half a trillion isn’t going to give us 4 percent growth. But bear in mind, that the key here is to buy time until households can repair their balance sheet. That’s been ongoing now for about four years, and this would give us a little more time to get that done.
Hobson: Chris Low, chief economist with FTN Financial, thanks as always.
Low: Thank you.