Aug 29, 2012 at 10:27 pm
Don’t know if this will make it into his speech tonight but I see where Rep Ryan is claiming that he and Mitt can create 12 million jobs. Here’s some context for that.
That’s about what you’d expect in terms of job creation in a normal American job market over four years. It sounds great right now—and “normal” would be great—given the job losses in the Great Recession and the slow growth since. But if you just run a typical macro model under the assumption that the economy is back to its normal growth path, regardless of who’s in the White House, that’s about what you’d get.
The figure below, for example, is the Moody’s.com forecast, 2012-2016, which in fact predicts the growth of 12 million jobs over these years. That’s about a 9% increase, about the same percentage gains as in each of the Clinton terms and over the second Reagan term.
I suspect people throw numbers like this around in hopes that they sound really impressive when what they’re really saying is “on our watch, the economy will perform as it normally does in expansions.”
I’m not saying that’s what’s going to happen, and I’m certainly not suggesting that Rom/Ry’s agenda will blaze the path back to normal levels of job growth. To the extent that their supply-side tax cuts and deregulation generate results similar to those of the GW Bush years, they won’t get anywhere close. But from what I can tell, they’re just looking at a typical model’s predictions—with no reference to their employment policy agenda—and claiming that’s what’s gonna happen.
Source: Moody’s.com, August forecast.
(Note: Interestingly, CBO has a considerably more pessimistic forecast, with slower job growth of only seven million, 2012-16. Relative to the more standard, Moody’s-type forecast, they predict a slower climb out of the Great Recession over the next few years, and slower labor force growth which constrains both GDP and job growth. Because the CBO does its projections under current laws on the books, they also have the fiscal cliff embedded in their projections, whereas Moody’s assumes we avoid the worst of it.)
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