Mitt Romney on Tuesday unveiled his plan to create jobs , and he prefaced it with this eye-widening promise: His proposals will grow the economy by 4 percent a year for all four years of his hypothetical first term, bringing unemployment down to 5.6 percent.
But the jobs plan he described wouldn’t be all that likely to pump up the economy in the short-term, no matter whether some elements would be economically salubrious in the long term: dropping the corporate tax rate to 25 percent; liberalizing international trade; cutting back on federal regulation; balancing the federal budget.
Then again, Romney’s promise isn’t quite as bold as it sounds.
True, the Congressional Budget Office late last month projected that the economy would grow a dismal 1.5 percent in 2013. But it also estimated average growth between 2013 and 2016 would be 3.6 percent, even with 2013’s poor showing factored in. And all of CBO’s estimates assumed that taxes would increase across the board, among other unlikely things. Without those assumptions, its projections are rosier, estimating that the economy could grow as much as 3.5 percent in 2013. The CBO also notes that the Federal Reserve’s economic projections hover around 4 percent for 2013. Romney’s unemployment goal for his first term, meanwhile, is actually two tenths of a percentage point higher than the CBO’s projection for 2016 unemployment.
Unlike congressional staffers, though, Americans aren’t so accustomed to thinking about policy baselines. So Romney can talk about achieving 4 percent growth and his audience is free to compare that with today’s rate — dismal as the country struggles through a recovery from a financial panic that was never going to be pretty.
CBO’s projections, of course, aren’t gospel. But with them in mind, Romney’s figures indicate that his plan isn’t some magic formula for near-term growth — and that, just maybe, his scathing attacks on the president’s economics record might be slightly unfair.