Last week, House Republicans offered a tax-cut heavy alternative economic recovery plan that they claimed would create 6.2 million jobs. The conclusion was based on a distortion of past research done by Council of Economic Advisers Chair Christina Romer. Over the weekend, Berkeley economist Brad DeLong obtained Romer’s response to the GOP’s misuse of her work. “Romer’s view is that the House analysis is absolutely incorrect,” said the White House talking points:
Question: The House claims that based on the research of CEA Chair Christy Romer, their plan would create 6.2 million jobs. Isn’t that a more effective way of jumpstarting the economy?
Answer: The Republican House analysis is flat wrong in its claim that the House Republican stimulus is more effective. No matter what your analytical assumptions, as long as they are consistent the plan the President supports would result in substantially greater job creation than the House Republican plan.
As CAPAF Senior Fellow James Kvaal has pointed out, the conclusion of the Romer paper that the GOP is quoting was “that the economic environment complicates the assessment of policy changes, not that tax cuts are the most effective way to create jobs.” A more recent analysis by Romer and Jared Bernstein concluded that government investment creates more jobs than tax cuts.