Predictions about the potential success of President Barack Obama's jobs stimulus plan have come flooding in as commentators consider his $447 billion American Jobs Act proposal. Equally predictable has been the polarized response, with some saying Obama is on the right path and others saying he is way off base.
Case in point: money manager and professional gadfly Peter Schiff's negative view of Obama's jobs plan versus Goldman Sachs Asset Management Chairman Jim O'Neill's more positive view.
Schiff scoffed in a Friday comment, "More of the Same," that while Obama was semantically savvy and never once mentioned the word "stimulus" in his hour-long speech on Thursday, the president's new jobs plan is "merely another government stimulus program in disguise."
"Like all previous stimuli, this round of borrowing and spending will act as an economic sedative rather than a stimulant," warned the CEO of Euro Pacific Capital, based in Westport, Conn. "Running up the deficit in the short run will not grow the economy, but will merely dig it into a deeper hole. A year from now there will be even more unemployed Americans than there are today, likely resulting in additional deficit financed stimulus that will again make the situation worse."
But according to Jim O'Neill (left), chairman of Goldman Sachs Asset Management, the GS Economics Department believes that the "larger than expected proposed fiscal stimulus" if implemented would take fiscal policy from a 1.5% of GDP reduction to a 0.5% stimulus.
"Put together with a clear bias to explore additional ways of monetary stimulus from the Fed, it is tough for me to see the big downside risks to the U.S. economy, at least cyclically," O'Neill wrote in a Sunday comment, "Clear, But Controversial Steps In the U.S."
