In a one-page economic plan released Thursday, Mitt Romney predicts the addition of 12 million new jobs and significant economic expansion if he were to be elected.
Authored by four economists, the plan foresees an increase of between 0.5% and 1% per year in gross domestic product growth over the next ten years. The paper also explains that these predictions are “conservative,” claiming there could be more growth if “hard-to-model gains from more effective regulation and decreased policy uncertainty could be captured.”
If the paper’s predictions were to occur, we could experience one of the strongest periods of employment growth in years. But 12 million new jobs over four years is a tall order, and would mean the economy must maintain the steady addition of at least 250,000 jobs every month for 48 months.
Romney plans to implement this growth by lowering tax rates and making spending cuts.
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According to the Washington Post, Romney’s plan includes ideas we’ve heard before, like increasing access to domestic energy resources, capping spending, cutting taxes, and “getting tough” on China. The Post asked Mark Hopkins, a senior analyst at Moody’s Analytics, if Romney’s plan is realistic.
Hopkins stated that “the current Moody’s Analytics baseline forecast is for payroll employment to increase by 12 million jobs from the start of 2013 to the end of 2016.” This means we may gain 12 million jobs in the next few years, regardless of whether Romney is elected or not.
If the economy plays out according to the Moody’s Analytics forecast, and Romney gets elected, he will simply take credit for producing those jobs.
The forecast relies on an extension of Bush-era tax rates for those who make under $250,000 a year, which is “more closely aligned with the Obama administration’s position.” It also assumes a bipartisan deal to scale back sequestration and achieve a long-run fiscally sustainable path.
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Hopkins argued that Romney is “essentially promising no more jobs than we currently expect to gain under proposals similar to those advanced by the Obama administration.” Therefore, the value of Romney’s one-page economic plan is minimal.
The paper doesn’t fail to criticize the Obama administration and its approach to the economic crisis. The authors write, “America took a wrong turn in economic policy in the past three years. The United States underperformed the historical norm shown in the administration’s own forecasts, and its policies are to blame.”
Critique is also given for Obama’s housing policies, as the authors claim the administration “ignored” the weak market.
Despite these critiques, Romney did not offer a detailed alternative. The paper does not describe how he plans to approach the housing market.
Romney has been criticized by many for not providing enough detail on his plans. One example can be seen in his promise to reduce federal spending from 24% of gross domestic product to 20%, yet Romney has not provided a list of programs he plans to cut.