Which Economy Would You Choose: Romney’s or Obama’s? http://bit.ly/RortYW The Romney Recession vs. the Obama Boom After campaigning for months on the long ago debunked slander that President Obama ” made the economy worse ,” Mitt Romney is now promising voters a ” big change ” over the next four years. President Romney’s change would be big, all right, just not in the way he is pledging. That’s because while a growing number of analysts believe the United States could be poised for breakout economic expansion and job growth, Romney’s toxic combination of draconian spending reductions, premature balanced budgets and regressive tax cuts is a formula for a new recession. Of course, you’d never know that hearing Governor Romney’s repeated boasts that as President he will create 12 million new jobs during his first term. But that figure is based on a triple deception. First, as the Washington Post’s Glenn Kessler documented, Romney’s 12 million figure is a fiction based on three studies of tax policy, energy and trade with China that estimate gains over 8 to 10 years. Romney’s second deception is just as cynical. Forecasts this year from Moody’s Analytics, Macroeconomic Advisers and the nonpartisan Congressional Budget Office already projected that based on recent trends and projected policy the U.S. economy will generate roughly 12 million jobs by 2016 anyway . But the Romney-Ryan plan isn’t a continuation of President Obama’s policies. And that difference makes all the difference between economic expansion and contraction. Last month, the Economic Policy Institute (EPI) examined the respective programs of candidates Obama and Romney to gauge their impacts on economic and job growth. EPI concluded that Romney’s plan for a $5 trillion tax cut, $2 trillion in new defense spending, and steep reductions in Medicaid and non-defense discretionary spending would lead to job losses and slowing GDP. The Romney recession is more severe still if the Republican produces a revenue-neutral budget by ending tax loopholes, deductions and credits. (It is that formula which led the nonpartisan Tax Policy Center to conclude that the Romney plan would slash taxes for the top five percent of earners while raising them for everyone else.) The result? Under this scenario, the Romney budget plan would on net decrease real GDP growth by 0.5 percentage points in 2013 and 1.1 percentage points in 2014. We project that employment would fall by 608,000 jobs in 2013 and roughly 1.3 million in 2014.9 Note that even if Romney’s additional tax cuts were revenue neutral, his budget plan would add to the deficit in both 2013 and 2014, trading bigger deficits for fewer jobs. As Nicholas Kristoff and Eduardo Porter each recently suggested in the New York Times, Americans need only (in Mitt Romney’s words) “look to the capitals of Europe” to see how the Romney-Ryan plan will work out. The U.S. is outperforming the austerity economies of the UK, Germany and much of the continent. And while the 2 percent third quarter American growth rate is still modest, it is far cry from the other side of the Atlantic, where the IMF is forecasting contraction for next year. As Kristoff rightly concluded: “If you want to see how Romney’s economic policies would work out, take a look at Europe. And weep.” Paul Krugman isn’t alone in predicting that a Romney victory in November could lead to a double-dip recession in 2013 “that simultaneously blows up the deficit and depresses the economy.” Many leading economists predict that far from rescuing the middle class, Mitt Romney will only batter it further. Joel Prakken, chairman of economic forecasting firm Macroeconomic Advisers, rejected the notion that Mitt’s 159-point plan would “reduce the unemployment rate from eight to five in two years.” James Galbraith worried that” if applied, these fiscal measures would be utterly draconian” and “the attacks on Medicare and Social Security would throw large portions of the population into…

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