Washington Secrets

Liberal group: Spend $650 billion to create 9.1 million jobs

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Politics,Paul Bedard,Washington Secrets

The nation needs to fill 9.1 million more jobs just to return the economy back to where it was before the 2007 start of the recession, according to a liberal group's critical analysis.

The Economic Policy Institute said that the jobs gap is costing the nation $1 trillion in economic output. The cure: Taxpayers should OK a new stimulus package to spend $650 billion this year to create new jobs.

In its study of the economy since the December 2007 start of the recession, which officially ended in June 2009, EPI found that the economy remains years away from full recovery.

They blamed a lack of demand from households, businesses and even governments that are "not spending enough to keep productive resources fully employed." That might be because real family income has dropped from $61,355 in 2007 to $55,640 in 2011.

No fan of slashing the federal budget, EPI suggests instead that President Obama and Congress should be spending to create jobs.

"Our top policy priority should be job creation, not aggressive deficit reduction that will just prolong our unemployment crisis," said EPI Research and Policy Director Josh Bivens. "Lawmakers took aggressive policy action to halt the freefall of the Great Recession, but we took our foot off the accelerator too soon."

The report said that "filling in the output gap for 2013 alone would require roughly $650 billion in additional fiscal stimulus."

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