Debt Ceiling Deal Threat to Short-term Job Creation and Long-run Economic Growth
Topics: Economics and Inequality Subtopics: Jobs and Workers, The Federal Budget
Aug 4, 2011
Authors: Andrew Fieldhouse and Ethan Pollack
Publisher(s): The Century Foundation
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The debt ceiling deal that President Obama signed into law will lead to massive job loss in the short term and threatens economic growth in the long run, a new The Century Foundation/Economic Policy Institute analysis finds. Debt Ceiling Deal Threatens Deep Job Losses and Lower Long-Run Economic Growth by policy analysts Andrew Fieldhouse and Ethan Pollack finds that the spending cuts in the deal will reduce GDP by $43 billion in 2012, lowering employment by roughly 323,000 jobs. The failure to extend the payroll tax cut will reduce GDP by $128 billion, resulting in roughly 972,000 fewer jobs, and the failure to continue emergency unemployment benefits will reduce GDP by $70 billion, resulting in roughly 528,000 fewer jobs. In other words, the debt ceiling deal will result in more jobs lost in 2012, relative to current budget policy, than have been created since employment troughed in early 2010. Download report. View Press Release.
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