Wednesday, September 7, 2011

Believe in America Is Not Going to Create 11 Million New Jobs by 2016

Did I really hear Mitt Romney say his economic plan will create 11 million new jobs in 4 years and witness 4 percent growth per year during this period? This story confirms as much:

Republican presidential candidate Mitt Romney announced his agenda for job creation Tuesday with a bold goal at its core: 11 million new jobs during the first four years of a Romney administration ... Specifically, Romney sketched his vision that the economy would grow at 4 percent a year under his watch, if elected in 2012. That would be significantly faster growth than the 3.6 percent pace predicted recently by the Congressional Budget Office for the years 2013 to 2016 (essentially the years of the next presidential term). And many economists say that even 3.6 percent growth may be an optimistic forecast.

This may sound very ambitious to some but even if the U.S. economy witnessed this type of GDP and employment rebound, we would still be far from full employment. During each of Clinton’s two years in the White House, we saw employment grow by more than 9 million per term as real GDP growth did average about 3.6 percent per year. When Clinton became President, the employment to population ratio was 61.4 percent. It is only 58.2 percent now. Romney’s goal seems to be to get this back to around 61 percent by the end of 2016. Not exactly believing in America!

Here is the plan. Besides a lot of Obama bashing, it has the usual GOP talking points about balancing the budget as we cuts taxes, regulations, and trade barriers. Glenn Hubbard wrote the Forward, which includes this:

America needs to get its growth groove back. And getting it back is about not just incomes, but jobs as well. To bring the unemployment rate back to its pre-financial-crisis level by the end of the next president’s first term would require real GDP growth averaging 4 percent per year over that period. That is an aggressive goal, but great progress can be made.

Growth groove? Of course, he notes that the 4 percent is an “aggressive goal” without predicting that any of these 59 proposals will actually achieve this goal.

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