and at 4:00 eastern time, at the movies, we're getting the grade on "contagion." president obama calls his plan a jolt, not a stimulus. but it is. still, the big question remains, will it work? i'm christine romans. welcome to your "your money." the american jobs act includes payroll tax cuts for 98% of businesses, a tax credit for hiring unemployed veterans, modernization of 35,000 public schools, a tax credit for hiring the long-term unemployed and a provision to help refinance mortgages at very low interest rates. stephen moore is an editorial writer with "the wall street journal." mark zandi says this plan, if it was enacted in its entirety could create almost 2 million jobs. let me guess, you're skeptical? >> i am. i'm friends with mark and have known him for a long time. but he's been wrong on his projections on jobs. an amazing statistic, i just looked up these numbers. we have 1 million fewer jobs today than we did in february of y when we created the $800 billion stimulus plan. so a lot of this hasn't worked. let me use a football analogy, if i may. if you run the ball up the middle three times and you don't gain any yards, on fourth down, you don't run the ball up the middle again. that's essentially what the president is proposing here. a lot of these proposals you just mentioned are things that were in the original stimulus plan or the payroll tax credit, we did that in january of this year, none of it has really worked to create the kinds of jobs. i'm very skeptical. >> harvard professor ken rogoff is with us. simplest terms you can think of, why can't we create more jobs in this country right now? >> there are two basic problems. one is we're in the worst recession, whatever you want to call it, since world war ii. and it's lasting a long time. we're coming out of it slowly. and of course there's the slow, grinding overhang of our growing trade with asia, the growth of china, india, brazil. and that also is hitting american jobs, particularly for lower educated workers. >> is it right to throw money at the problem in the near term? you're talking about big structural issues in the economy. >> i'd like to see big structural solutions coming out of this crisis coming out of congress and the president. that said, i don't think it's necessarily wrong to try to -- at least not pull back the stimulus. that's what's going on right now. you have to put some new to replace what you're taking out. think of it like taking an aspirin. when you're pretty sick, it will make you feel a little better. but it's not a cure. >> gloria borger, i can't wait to see what you come up with. cnn poll finds two-thirds of americans say creating jobs is a more important goal for this administration than reducing the deficit. gloria, the president called for a joint session of congress to deliver that jobs plan. clearly he wanted the american people to view him as a leader on job creation. did he convince americans? >> we'll have to wait and see. he was talking to independent voters out there, the swing voters that are so important that are so upset about the fact that congress isn't able to get anything done. what the president was trying to do was to say to voters, look, i am a reasonable man, i'm laying down a gauntlet for congress. they can decide if they're going to take it or leave it. but if republicans out there decide that they don't want to take this package, they're going to have to explain to the american voters why. what was very important was the president said, i'm going to take this on the road, which means the game is on here for the 2012 campaign. and he's clearly positioning himself, a la harry truman, against a congress that if it doesn't act, he's going to say, they're doing nothing. >> repairing 35,000 schools in the face of budget cuts and giving teachers more money. hiring benefits for unemployed veterans, there are things in here, you go down the line, it's going to be hard for a republican seeking reelection to stand up and say, i have voted against american veterans. >> yeah, look, i agree with a lot of what gloria just said. no question that jobs is priority number one, with the voters. it's also true that the voters want some quick action here. the problem, gloria, is if you look at the last election, why did republicans win this resounding election? what was their central promise? we're going to stop the spending, we're going to stop the debt. so to then turn around and say, by the way, we're going to pass a half a trillion new spending and debt deal, that doesn't go over very well with the people who voted for these -- >> i agree. we were waiting for the other shoe to drop which is on september 19th when the president says he's going to lay down his plan for the super committee. and that is apparently going to include how to pay for this. the one interesting thing i heard from the president which is that he's willing to take on his own democrats on the question of medicare reform. >> but i've been in washington for 28 years. you've been in this town for a long time. the one promise that is always made and always broken is we're going to spend money now and save later. we've never done that. that's the reason we have a $15 trillion debt. the president is going to say, we're going to cut spending in 2018, 2019, 2020, what really believe that is? >> people say that they want to balance the books and they want deficit reduction and they want to live within our means until they realize the entire country has been living beyond our means. when people realize that budget cuts mean jobs and that their job could be lost, they change their tune a little bit. >> they certainly do. americans have wanted lower taxes and more spending for a long time. now they say they want to have not so much debt but they still want lower taxes an don't want to cut the spending too much. i think it is a very angry populace. for the president to present a rational plan to angry voters who are quite unpredictable -- >> do you think this would create jobs if the president in an ideal world, not for his opponents in the house, if we were to get this whole thing through, would it create jobs? >> yeah, i think it would create some jobs. putting a number on it is hard. but i don't think there's any question that this awful debt negotiations and debt deal that they had over the summer sort of overdid it in the short run with cutting back stimulus while the economy is still weak. it didn't do anything. they kicked it all to the super committee, pushed everything into the future. this is more of the same. it's getting pushed into the future, but we are in a very deep downturn at the moment and need to be very careful. >> ken, i read your book. i love your book. i think every economist should read it. but the one thing i would challenge you on a little bit is what i glean from reading your book is that on this recession that we're in, this is a classic kind of debt recession where americans at the business level, at the individual level and of course at the government level are overleveraged. there's too much debt out there. what i don't get about all this -- and this is my question for you -- if we have too much debt, how is more debt the solution to getting out of this crisis? i think it's probably exactly the wrong thing to do right now. >> i certainly agree, stephen, that this idea of a jolt and suddenly you'll be better again is wrong. and the president did talk about doing something about the mortgages and the housing. that's where i'd like to see more of the focus. i think that would really help pull us out. i'm not giving a blanket endorsement to it but saying we need to be careful. >> more on this in a minute. the economy is slowing down, again, recession fears are everywhere. if it's about to get worse before it gets better, how long can we expect the do you knwntu last? we're going to look at that next. 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[ kimberly ] and university of phoenix made it possible. learn more at phoenix.edu. look at all this stuff for coffee. oh there's tons. french presses, espresso tampers, filters. it can get really complicated. not nearly as complicated as shipping it, though. i mean shipping is a hassle. not with priority mail flat rate boxes from the postal service. if it fits it ships anywhere in the country for a low flat rate. that is easy. best news i've heard all day! i'm soooo amped! i mean not amped. excited. well, sort of amped. really kind of in between. have you ever thought about decaf? do you think that would help? yeah. priority mail flat rate shipping starts at just $4.95, only from the postal service. a simpler way to ship. economists differ on whether america is headed for another recession. but most americans find that question irrelevant. 82% of those responding to a recent cnn orc poll say we're currently in a recession. if four out of five consumers are feeling like this is a recession, ken, a continued slowdown seems to be inevitable? >> that's not a good sign. these polls have a lot of interpretation in them and what consumers are doing matters more than what they're saying. not so long ago in july, durable goods, refrigerators and things like that, were picking up rather crisply. so maybe the hard numbers are not as bad as the mood. but if the mood keeps this way, of course, it will feed into the hard numbers. >> stephen, is this a crisis instead of a recession which may require an entirely different approach to achieve a typical recovery, do you think? >> i think it does need a total different approach. when ken was talking in the previous segment about this being the worst recession since the great depression, in some ways it is. but in the 1970s, that was even a worse time for economic decline for this country. stocks lost 67% of their value in real terms. and what makes this different from that recession that we had in the '80s is that reagan came in and used an entirely different approach. he deregulated the economy, got federal spending under control, fought inflation and did a big tax cut. with 18 months of that presidency, we had an incredible expansion. we were creating about 250,000 jobs a month. i guess i would say, look, if we got the policies right, there's no reason this has to be a three or five-year-long recession. i think the economy can turn around pretty quickly. but i don't think these prescriptions that we're using right now are working very well. >> you think the president's policies what's delaying a recovery. but, ken, you've written about this extensively. it's going to take time no matter what anybody does? >> i disagree with stephen on this one. i think this is worse than what we were in the in the '70s. i'm sorry to say this is worse. and the state of the financial system, the financial crisis, typically is associated with something much worse. i do think we could have expected three or four years of very difficult employment. but the trouble is it's not looking better still going further out. it's a legitimate question. well, should we try something else? what should we be trying? that's a fair question. i don't think anyone -- i think if john mccain became president in 2001, i don't think it would be real different today. >> the political problem is we're trying to spend and trying to cut at the same time. and the american public wants everything. and that's what politicians want to give them. they say, we really care about deficit reduction and understand that's the key to the future. on the other hand, we want to spend some money and give you your -- extend your payroll tax cuts so that we can put some more money in your pockets. so it's a very difficult political situation, not only for the president but also for the republican party and for members of congress whose approval rating, by the way, is at 14%. so they understand the public wants them to get something done. >> there's also been -- if you look at the data -- i've been looking at it very closely. i think there's been a misdiagnosis of what the problem is with the economy. the keynesians that obama listens is say, we don't have enough consumer spending. if you look at what's happened since late 2009, consumer spending has been rising at a pretty -- not a robust pace but it's been rising. what has fallen dramatically and has not caught up to where it was pre-recession is business investment. i'm a big believer that investment, spending by businesses, is what creates growth. and you're not going to get growth in spending -- >> i thought all those years of tax cuts were going to make wealth-creators create jobs and build the infrastructure. why didn't that happen? >> in the president's plan, he talks about small business and helping small business. there are some things in his jobs proposal that would encourage small business to hire, which i think republicans will embrace, right? >> but don't forget, the other thing he said is we're going to pay for this with a big tax increase on small business in 2013. small businesses don't hire on the basis of one or two years. they're looking forward and saying, the president is going to raise taxes on employers in 2013, that's a negative, that's bearish for the economy. >> i think demand is what makes small businesses hire -- everybody wants demand, rishgts ken? >> they do. but i certainly agree with stephen, they have misdiagnosed this as a typical recession. they've said we need a big jolt of spending or stimulus and we'll get out of it. it is not a typical recession. we never got out of the last one. i think president reagan did a great job, but nobody's perfect. we almost had a catastrophic savings and loan crisis. we almost had a crisis from over deregulation. it's very tough to be president in these situations. >> and even in the best of times. presidents get too much blame and too much credit, bottom line, and there's a lot of different moving parts. but you need leadership and confidence. ken rogoff, stephen moore, gloria borger, another great discussion. republican presidential candidates have a thought or two or in mitt romney's case, 59 thoughts on how to create jobs. will their plans make a difference? ordinary rubs don't always work on my arthritis. try capzasin-hp. it penetrates deep to block pain signals for hours of relief. capzasin-hp. take the pain out of arthritis. the first thing i ever learned covering the markets is that gridlock is good for business. diane swonk is chief economist at mesirow financial. a year ago, we were heading into a mid-term election. we knew it would result in republicans at least taking over the house. you stood up against that conventional wisdom and said this was exactly the wrong time for gridlock in washington. you were so right. since then, a near government shutdown, a debt ceiling crisis that resulted in an unprecedented downgrade of our country's credit rating. we've got an economy that literally didn't create any net new jobs last month. do you think things will get better in the year to come? >> i think the status quo is more likely. the problem is we're about a 50-50 coin toss chance of recession at this stage in the game. that's one of the hard issues as we debate all these different jobs program, the historical models tend to give us estimates on what they might do for the economy just don't work. ken rogoff said post-financial crisis economy is just different. that's what is the problem here is that people keep trying to use the old solutions to new problems. and that's not going to help us, although it is important to preserve the status quo because as bad as the status quo is, it could be worse. and many of the proposals that are out there will help to preserve the status quo and that's what we need to focus on at this stage of the game. >> the president's jobs plan, is that preserving the status quo and the best we can do right now? >> parts of it. the whole plan, no, it isn't. there are parts where they made estimate, models have estimated it would create as many as 2 million jobs. as much as i respect and admire the people who make those estimates, i don't agree that's how many jobs will be created out of it because of the structural problems we face. that said, there are parts of the president's plan that are very important. we can't have a tax hike which would be the equivalent of letting the payroll tax cut expire at the end of the year at this critical time. unemployment benefits are keeping a floor on consumption. so treading water and keeping our head above water, it's really critical because the alternative is going under. >> roland martin is a cnn contributor. roland, the unemployment rate for january 2008 was 7.8%. today, it is 9.1%. last month, the economy didn't create any net new jobs. republicans argue this is because of his policies, not despite them. roland, why aren't the president's policies then creating more jobs? >> first of all, that's if you accept the republican rationale which is absolutely idiotic because somehow it ignores the rest of the world. so we're sitting here acts as if what a president can do alone somehow can fix the economy. look, we gave banks money under the view that somehow they were going to lend the money out. they didn't. they shored up their balance sheets. also, our economy is all based upon consumer demand, consumer spending. if you don't have the confidence, they don't spend. you're in the going to add more employees if you don't have more customers. it's ridiculous to somehow think that a presidential policy alone somehow would drive this. we're operating in a whole new world these days. and politicians don't want to accept that. any time you hear republicans and democrats say, this is the sole reason, they're playing a political partisan game and not a real game of what's happening in the real world. >> i want to take a look at the economic plans that republican candidates would put into action if elected. overall, the republicans overlap on a few conservative ideas. they all want to cut the corporate tax rate, repeal "obamaca "obamacare," shrink government. mitt romney wants to develop this reagan economic zone. he's talked tough about china, more from him than on anybody else. jon huntsman wants to cut individual tax rates. and he was endorsed by "the wall street journal." michele bachmann, mostly people are talking about her pledge for $2 gas. but there's a lot more in there. she would like to lower corporate tax rates. greg vallier, what's different about those gop plans that's not part of president obama's solution? >> they can make a case that what the president has doing has not worked. it doesn't look like it's working very well. they can make a case that we have to try something different. but let me make this point. i think in two important areas, they have touched hot buttons they might regret. the first is social security. the rhetoric from perry is so harsh even mitt romney called him out on it, that he could start scaring senior citizens. i have a rule of thumb, don't scare my mother. if my mother starts to get scare