Friday, May 25, 2012

Romney’s Job-Killing Budget Can’t Make Unemployment 6%

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By Bill Scher

This week, Mitt Romney made the bold prediction that in four years, his policies would reduce the unemployment rate … to the level economists project it will be if we don’t do anything: 6%.
At least It fits on a bumper sticker. Mitt Romney: Reach For The Baseline.

But what’s sad about Romney’s pledge is that even when he is promising to run in place,he is exaggerating.

As Romney is a supporter of the House Republican budget, he has embraced policies that are sure to increase unemployment above the baseline projection.

According to Ethan Pollack of the Economic Policy Institute, “Using a standard macroeconomic model that is consistent with that used by private- and public-sector forecasters, the shock to aggregate demand from near-term spending cuts would result in roughly 1.3 million jobs lost in 2013 and 2.8 million jobs lost in 2014, or 4.1 million jobs through 2014.

Contrast that with the President’s budget proposal, which would create more than 15 million jobs thanks to investments in infrastructure, teacher hiring, clean power generation and expanded broadband.

President Obama is also the one with the superior past record on job creation. His Recovery Act reversed the massive job losses from the financial crisis, and reduced the unemployment rate from where it would have been if the Republican filibuster was successful.

Republicans try to nullify the triumph of the Recovery Act by claiming it failed to meet the White House expectation and keep unemployment below 8%. But that was based on a baseline projection made in January 2009, before the Recovery Act passed. Unemployment broke 8% the next month!
That’s not a failure of the Recovery Act, but a failure of two White House economists to foresee that the economic freefall hadn’t yet hit rock bottom, and in turn, accurately assess the baseline.

Economists generally say the Recovery Act performed as advertised: reducing unemployment two percentage points from where it would have been if no action was taken.

Contrast the success of the Recovery Act to Mitt Romney’s record. He presided over one of the worst job creation performances of any state while he was governor of Massachusetts, and that was during the Bush presidency, when the nation had the worst jobs record on record.

So one person has a proven track record of creating jobs while in public office, the other lost jobs while in public office. One person offers a budget that would create jobs. The other backs a budget that is sure to lose jobs.

If jobs is your issue, this is not a hard call.

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