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A Closer Look at Romney’s Economic Plan

September 7, 2011, 5:29 pm
A Closer Look at Romney’s Economic Plan

Now that we’ve had a day to digest Mitt Romney’s economic plan, Matthew Yglesias looks between the lines and finds what he calls an “agenda on social welfare policy that’s basically every bit as extreme as anyone else’s.”

So although Robert Reich calls the plan “unremarkable” and “way too reasonable for the current G.O.P.,” Mr. Yglesias points out that Mr. Romney’s commitment to lower taxes will have to come at the expense of something, and that something could very well be Medicare.

Mr. Romney’s campaign officials declined to say just how much they believed the lower rate would be offset by generation of taxable revenues in the United States by more companies. And the plan also specifically “does not promise the immediate creation of some imaginary number of jobs, because government cannot create jobs.”

Campaign officials did say that the plan, in its totality, would raise economic growth over all to an average of 4 percent on an annual basis, induce private companies to create 11.5 million jobs and reduce the unemployment rate to 5.9 percent by the end of Mr. Romney’s first term in office.

That strikes economists as hugely ambitious. “I think it’s a stretch,” said Michael Spence, a Nobel Prize-winning economist and the author of “The Next Convergence: The Future of Economic Growth in a Multispeed World.” “Nobody knows how well we’re going to respond both on the public- and private-sector side and restore competitiveness.” Acknowledging that the plan was of course an “opening shot,” Mr. Spence, a senior fellow at the Hoover Institution, said: “Does his set of policies do it? My answer would be no.”

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