You may have heard RNC Chairman Michael Steele spouting off about how:
the Republican plan would create 6.2 million jobs, twice the number created under the Democrats' plan, at half the cost.
Well, as Elana Schor and Eric Kleefeld have reported, though those numbers come from a credible source, using them as they are being used is questionable at best.
The numbers come from a study done by now Chair of the Council of Economic Advisors Christina Romer and her husband, David Romer in March 2007. The study concludes that the net effect of a tax increase of 1% of the GDP would be a loss of 2.2% - 3.0% in the GDP. Catch that? Tax Increase. Although the studies discusses 'tax changes', nowhere does it put forward the idea that a tax cut equal to 1% of the GDP would necessarily result in a 2.2% - 3.0% increase in the GDP. That's just the Republican's on the Ways and Means committee deciding that they can just flip it and it will necessarily follow.
That 6.2 million jobs number is directly derived from the great assumption that you can just flip the math around and get that number. The Ways and Means Republicans take the 2.2% - 3.0% growth number and then apply the math that Romer is now using to that assumption and come up with 6.2 million jobs. Look at it here (page 5 will show you how they got their numbers).
As Kleefeld quite rightly points out:
There are two problems here. First, that paper didn't actually examine tax cuts, but instead looked at the negative effects of tax increases under normal circumstances. The Republicans' predictions about tax cuts come from flipping the numbers around and assuming the mirror-image effects.And furthermore, they've totally ignored the fact that we are in an abnormal scenario right now, with different fundamental underlying assumptions.
I am not sure if it worries me more that Steele, Boehner and Co. are using these numbers just to win the political fight or whether they might actually believe them. Given their apparent lack of intellectual curiosity, it might be the latter that is happening. That is scary.
Comments welcome,
Pat McGovern
It's got electoral votes. It's what politicians crave.
