"Romney’s Economic Plan ‘Update’ Just Doubles Down On His Tax Cuts"
Our guest blogger is Adam Hersh, an Economist with the Center for American Progress Action Fund.
The Romney campaign’s “update” yesterday of its economic plan contains little new in it besides regurgitations of dubious old claims, proving only that the GOP presidential candidate and his advisers take seriously their vow that “we’re not going to let our campaign be dictated by fact checkers.”
Perhaps the most spurious claim from the Romney economic team is that President Obama’s economic policies are responsible for America’s current economic woes. Any responsible reading of the fact shows that Obama policies are delivering the U.S. economy from an economic abyss caused by eight years of George W. Bush.
The chief authors and advocates of those Bush policies, of course, are Columbia University’s Glenn Hubbard, Harvard University’s Gregory Mankiw, and Kevin Hassett of AEI — the same men now in charge of Romney’s economic platform. From 2001 to 2008, their policies delivered the weakest economic expansion since World War II and set the stage for the financial crisis and Great Recession. This is the situation from which millions of Americans are still recovering.
Romney’s economic plan, like Bush’s, is based on a dubious assumption: That massive tax cuts largely benefiting the wealthy will spur economic growth. As chairman of President Bush’s Council of Economic Advisers, Hubbard predicted the first round of tax Bush tax cuts would “quickly deliver a boost to move the economy back toward its long-run growth path,” starting with adding 300,000 more jobs and half a percentage point to the economic growth rate.
He predicted a second round of tax cuts would add another 1.4 million jobs to the U.S. economy, over and above the 3.1 million jobs the economy would create on its own from natural economic growth in that time. Mankiw — who succeeded Hubbard as chairman of Bush’s CEA — co-signed a letter with Hassett “enthusiastically” endorsing more tax cuts because “it is fiscally responsible and it will create more employment [and] economic growth.”
By 2007, Hubbard and Mankiw’s job-creation predictions had fallen nearly eight million jobs short of their mark. And yet, Romney’s economist supporters maintained this week that his as-yet-unspecified tax plan would create at least seven million new U.S. jobs in Romney’s first term.
They provide no causal analysis for this claim, just a gut feeling that conservative policies would create an economic surge. The good news is that the American public appears wise to the Romney-Bush rehash. A New York Times/CBS poll out today shows that 67 percent of people believe Romney intends to ape Bush’s economic policies.