Reading the tea leaves of the stimulus’s effects on the economy:  Obama’s Stimulus Will Cause ‘Lower Wages’ for American Workers, Says Congressional Budget Office

The huge economic stimulus package that President Obama signed into law Tuesday will result in “lower wages” for American workers, according to the Congressional Budget Office (CBO).

The CBO analysis, dated Feb. 11 and sent to Sen. Judd Gregg (R-N.H.), says the $787-billion plan will increase employment in the short-term, but will run up deficit spending which will “crowd out” private investment in the economy in the long-term.

The analysis concludes that the stimulus will put downward pressure on Gross Domestic Product (GDP) and wages after 2014. (The Gross Domestic Product is the total value of all goods and services produced in the United States in one year.)

PDF here.

What does the White House say?

The White House estimate that the stimulus bill will create 3 to 4 million jobs comes from a transition team report completed before Obama took office and before a bill was drafted in Congress. Further, the report said there is “considerable uncertainty” about the job estimates.

The White House released a state-by-state breakdown of how many jobs would be created or saved. The breakdown showed that California would get 396,000 jobs; Florida, 206,000 jobs; Georgia, 106,000; Illinois, 148,000; Michigan, 109,000; New Jersey, 100,000; New York, 215,000; Ohio, 133,000; Pennsylvania; 143,000; and Texas, 269,000 jobs.

PDF of White House estimates here.