I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
GOP reps claim proposal would create 6.2 million jobs … but would it?
If you were watching C-SPAN Wednesday during the debate in the U.S. House about the economic stimulus package, you probably noticed a new talking point coming from the Republicans.
The Republicans, every single one, voted against the bill. Instead, they offered their own bill that focused on tax cuts, and in defense of that bill, the number that kept coming up was “6.2 million.” That’s not the amount of money spent on a program, but rather the number of jobs they said would be created with their alternative stimulus bill.
So where did they get their number? Josh Marshall from Talking Points Memo said, “Well, it turns out, pretty much out of their backsides.”
Elana Schor, also of Talking Points Memo, analyzed the fuzzy math the Republicans were using.
The Republicans used the results of Dr. Christina Romer, the chair of Obama’s Council of Economic Advisers, in a weird way. A GOP document says this:
Using different assumptions and different sample periods, they estimated that a change in taxes equal to 1 percent of GDP resulted in a 2.2 percent to 3 percent change in GDP, with tax cuts increasing GDP.
We find Dr. Romer’s previous conclusions on the economic impact of change in tax policy as an appropriate multiplier for examining the impact of stimulus proposals.
OK, what’s the problem? Plenty. Schor writes:
Except that the Romer analysis used by the GOP (linked to in the third paragraph of this page) never examined the effects of tax cuts on a deflationary economy — it looked at the effects of tax increases on the economy as a whole and found a negative effect of 2.2% – 3% on GDP.
The Republican analysis simply flipped those numbers to positive and applied them to the GOP-backed tax cuts, then multiplied the result by a broad job creation estimate used in a recent paper from Romer and Jared Bernstein, an economic adviser to the vice president. If you read the Republicans’ document, you can see the caution advised in assuming that 6.2 million jobs would be created by their plan.
In other words, they took an economic analysis of raising taxes, flipped the numbers and said that was what would happen if they instead cut taxes.