The last unemployment numbers before the election show a steady trend of job creation during the Obama administration.
The balance shows that private sector payrolls increased $5 million during the past 32 months. That is an important change of direction that took the government a year, to go from losing 800,000 jobs to creating them.
However, the results are unsatisfactory because in addition to recovering jobs, it’s necessary to have more jobs in order to absorb population increases.
An analysis by Moody’s Analytics and Macroeconomics economists estimated a while ago that over the next few years, job creation will start returning to normal and reach 12 million, meaning an increase to more than 200,000 jobs created per month. This is a number the Obama administration reached in seven of the past 20 months.
That’s why the impressive number of 12 million jobs promised by GOP presidential candidate Mitt Romney seems way less spectacular when examined up close.
The criticism of Obama focuses on not having created enough jobs, like previous Republican administrations did after the recessions of the 1970s and ’80s. That is a misguided comparison, since none of those recessions had the depth and widespread impact of the Great Recession; only the Great Depression came close.
But this comparison helps the Romney-Ryan formula appeal to nostalgia for the “good times” of former President Ronald Reagan. Especially economic policy, which evaluated with the benefit of hindsight, led to the worst deficit of his time.
In reality, demand for a product is what encourages businesses to hire employees; no one is going to do it just because their taxes were cut. That would be bad business.
That’s why we think that Romney’s proposal for the economy has higher possibilities to jeopardize more jobs in the long-term. After all, the Republican candidate is offering the same vision as George W. Bush, which led the country into the Great Recession.