From Media Matters 1/29/09:
Mark Zandi, chief economist at Moodys.com, has also predicted that even if real GDP returned to its 2008 level by 2012, unemployment would still remain over 9 percent if fiscal stimulus is not implemented. If a stimulus plan of at least $750 billion is passed, Zandi predicts that GDP will reach its 2008 level in 2010 and that unemployment will fall back to "close to 5% by late 2012."
From Zandi's January 6 report:
"The $750 billion stimulus plan would not forestall a sizable decline in real GDP in 2009, but it would ensure that real GDP returns to its previous peak by the second half of 2010 (see Table 3).
The fiscal stimulus limits the peak-to-trough decline in jobs to some 5 million, and the unemployment rate peaks at nearly 9% in early 2010.
With the stimulus, the unemployment rate falls back to its full employment rate of close to 5% by late 2012.
Without the stimulus, the unemployment rate rises to well over 11% by mid-2010 and ends 2012 at over 8%, still extraordinarily high."
One year $ change in real GDP for a given $ reduction in federal tax revenue or increase in spending
Non-refundable Lump-Sum Tax Rebate 1.02
Refundable Lump-Sum Tax Rebate 1.26
Temporary Tax Cuts
Payroll Tax Holiday 1.29
Across the Board Tax Cut 1.03
Accelerated Depreciation 0.27
Permanent Tax Cuts
Extend Alternative Minimum Tax Patch 0.48
Make Bush Income Tax Cuts Permanent 0.29
Make Dividend and Capital Gains Tax Cuts Permanent 0.37
Cut in Corporate Tax Rate 0.30
Extending Unemployment Insurance 1.64
Temporary Increase in Food Stamps 1.73
General Aid to State Governments 1.36
Increased Infrastructure Spending 1.59
source: Mark Zandi, chief economist at Moodys.com