Romney’s 12 Million New Jobs

Mitt Romney, or more accurately several economists who do some of his thinking, say that he can add 12 million jobs to the economy in the four years after he is elected. CNN Money summarized the paper that supports the plans to reboot the jobs market:

According to the position paper, the quick turnaround would be spurred by the lower tax rates and drastic spending cuts that are the hallmark of Romney’s plan.

The plan goes on in great detail to show how tax rate changes would spur a new level of economic activity and spending cuts would resurrect the private sector. What the analysis fails to show is how government spending cuts can be matched with the stimulus so many economists believe the country needs, even though experts say such plans would drive up the deficit. That sort of increase is against all of Romney’s principles.

The notion that taxes are regressive is at the heart of Romney’s plan. Capital freed up will go toward consumer spending. The fact the many people and businesses in the United States would like to rebuild their “balance sheets” and pay down large debt loads gets little mention in the Romney plan. Neither does the movement toward savings as a large portion of the population moves toward retirement with inadequate assets.

As most experts point out, the idea that the economy could add 12 million jobs in such a short period is in most ways an wild assumption. Even in periods of American history when GDP growth was at historically high levels, that rapidity of job creation was rarely, if ever, obtained.

If Romney wants the public, and the economists who inform it, to buy into his plans, he would be better of to use a much lower figure — say six million. It would still be an impressive claim and one less likely to be mocked.

Douglas A. McIntyre