updated 6:24 p.m. EST, Sun February 8, 2009
Stimulus will lead to 'disaster,' Republican warns

WASHINGTON (CNN) -- Leading Republicans warned Sunday that the Obama administration's $800 billion-plus economic stimulus effort will lead to what one called a "financial disaster."

"Everybody on the street in America understands that," said Sen. Richard Shelby, the ranking Republican on the Senate Banking Committee. "This is not the right road to go. We'll pay dearly."
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The nonpartisan Congressional Budget Office reported last week that the measure is likely to create between 1.3 million and 3.9 million jobs by the end of 2010, lowering a projected unemployment rate of 8.7 percent by up to 2.1 percentage points.

But the CBO warned the long-term effect of that much government spending over the next decade could "crowd out" private investment, lowering long-term economic growth forecasts by 0.1 percent to 0.3 percent by 2019.
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But Sen. Kent Conrad, the chairman of the Senate Budget Committee, told CBS the current recession -- which has already produced an unemployment rate of 7.6 percent -- is in danger of a deep downturn "like we saw in the Great Depression."
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