Yesterday, Mitt Romney released an economic plan entitled: “Mitt Romney’s new plan for a stronger middle class.” Many of the ideas in the one-page plan are ones we’ve heard before, such as increasing access to domestic energy resources, capping spending and cutting taxes, and getting tough on China. Some are descriptions of outcomes Romney would like to see, and not actual policy proposals to accomplish them, such as: “Give every family access to a great school and quality teachers.”
Nonetheless, in a press release today, the Romney campaign claimed that this new plan would create 12 million new jobs. “My plan will turn things around and bring the economy roaring back, with twelve million new jobs created by the end of my first term,” Romney said.
I ran this claim past Mark Hopkins, a senior analyst at Moody’s Analytics. His conclusion: according to his firm’s projections, the economy is already set to add 12 million jobs in the next four years, provided a series of policy outcomes take place, such as a long term deficit deal that includes tax hikes on the rich and cuts to entitlements.
Hopkins tells me:
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 (134 million to 146).
If Romney is elected and the trajectory of the U.S. economy plays out according to script, obviously he’ll be able to take credit for those 12 million new jobs.
However, the economic assumptions embedded in our forecast include only an extension of Bush-era tax rates for those under 250K, which is more closely aligned with the Obama administration’s position. We also assume a bipartisan deal to scale back sequestration and achieve a long-run fiscally sustainable path, with Democrats accepting reforms to Social Security and Medicare in exchange for the increase in top tax rates.
In effect, therefore, Romney is essentially promising no more jobs than we currently expect to gain under proposals similar to those advanced by the Obama administration. There’s not enough in Romney’s plan to estimate how many jobs it would create. If he’s saying the net change will be 12 million jobs, that’s exactly what we’re estimating without Romney’s plan.
What this means, in effect, is that Romney’s plan, as he’s outlined it, does not give us enough to gauge whether it would make an appreciable difference on unemployment over the next four years. In other words, there’s no “value added” here. More broadly, Hopkins and Joel Prakken of Macroeconomic Advisers don’t believe that Romney’s ideas to fix the short term crisis, as he’s laid them out in interviews, would actually do anything to fix the short term crisis.
Romney’s one-page plan essentially confirms again that he still sees no need to tell us with any meaningful specificity what he would do to fix the economic crisis: He says he’ll cut taxes without saying how he'd pay for it and says he’ll slash government without saying in any serious detail what programs he’d eliminate. As many others have already pointed out, his guiding assumption seems to be that his best chance of winning is for the election to shape up as a little more than a referendum on Obama’s economic performance. He has better chance of preventing voters from seeing the election as a clear choice between two different specific policy approaches if he keeps his own prescriptions vague.
The question of how to fix the economic crisis is the central, driving issue in this presidential race. How about some serious, in depth stories from the big news orgs comparing the two candidates’ plans to actually accomplish that?