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Romney-Ryan Economic Plans Would Increase Unemployment, Deepen Recession | The Nation

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Ari Berman

Ari Berman

 On American politics and policy.

Romney-Ryan Economic Plans Would Increase Unemployment, Deepen Recession

Much has been written in recent days about Paul Ryan’s plans to privatize Medicare, dismantle Social Security, massively cut taxes for the wealthy and drastically redistribute income from the bottom to the top.

Yet perhaps the most disturbing feature of Ryan’s budget is that, in the midst of a prolonged recession, it would cost the US economy millions of jobs. Ryan’s 2011 budget plan proposes what the Center for Budget and Policy Priorities calls “the most severe and wrenching budget cuts in US history—two-thirds of which would come from programs for people of low or moderate incomes” (Medicaid, Pell Grants, food stamps and low-income housing). According to the Economic Policy Institute, “The shock to aggregate demand from near-term spending cuts would result in roughly 1.3 million jobs lost in 2013 and 2.8 million jobs lost in 2014, or 4.1 million jobs through 2014.”

Heather Boushey of the Center for American Progress calls Ryan’s budget “austerity on steroids,” while Mike Konczal of the Roosevelt Institute dubs it “bizarro stimulus.” Explains Konczal: “These are arguments that doing things traditionally thought of as the opposite of economic stimulus will be the real stimulus and help bring unemployment down.” (Ryan’s also a fierce critic of actions taken by the Federal Reserve to reduce unemployment.)

Ryan’s new boss, Mitt Romney, has also pledged to improve the economy while advocating ideas that would actually make the economy worse. Romney economic adviser Glenn Hubbard, chairman of the Council of Economic Advisers under George W. Bush, claims Romney would create 12 million jobs in his first term by capping spending, slashing corporate taxes and repealing healthcare reform and financial reform. Yet a host of prominent economists surveyed by the Washington Post’s Greg Sargent found that “Romney’s ideas would do little or nothing to fix the immediate crisis, and could in the short term make things worse.” Said Mark Hopkins, senior adviser at Moody’s Analytics: “On net, all of these policies would do more harm in the short term. If we implemented all of his policies, it would push us deeper into recession and make the recovery slower.”

In contrast, the jobs plan introduced by Barack Obama last September would create 1.9 million jobs and reduce the unemployment rate by a full percentage point, according to Mark Zandi, chief economist at Moody’s. That’s not enough to turn the US economy completely around, but it’s a whole lot better than what Romney and Ryan are proposing.

Read more of The Nation’s coverage of Paul Ryan: Bryce Covert, “Paul Ryan’s Budget Deals a Body Blow to Women’s Bottom Line.” And remember when Paul Ryan gave the Republican response to the State of the Union? Katrina vanden Heuvel took apart his budget back then, in “Paul Ryan, the Republicans’ ‘Thinker.’ ”

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