Written by: Utkash Dubey and Lucy Oyer
With the economy in a relatively dismal state, the next president needs to have the most comprehensive and feasible fiscal agenda. Challenger Mitt Romney is the clear choice when it comes to job creation. This is credited to a more logical and defined tax policy and, most importantly, a reliable approach to federal spending. During his term, President Barack Obama built upon a different mentality, and fostered the growth of a government-dependent group of people.
Romney emphasizes fiscally conservative policies that reflect core economic ideology of Republicans. His tax policy leaves room for improvement, but it is a step in the right direction. Alleviating middle-class Americans of a majority of their financial burdens by starting with a lower income tax rate empowers American consumers to safely spend their money and promote business growth and cash flow—two key characteristics of a successful economy. Romney addresses this fairly with a 20 percent cut on marginal taxes for all middle-class Americans. Coupled with Romney’s recognition of the high corporate tax rates and his own plan to lower them by 10 percent, Romney will successfully trigger job creation and meaningful growth.
Along with this policy, Romney fosters a healthier mentality: that hard work really pays off. Rather than leaving the lower-middle class to rely on government support and regulated programs, the policies Romney wants to enact will give a sense of self-reliance and hard work, as they translate into income that they keep more of. Romney’s tax cuts bring a consumer-business based mentality and also stresses the core values in fiscal conservatism that made this country great.
On that note, American mentality is especially an area where Obama failed. Rather than taking a resilient approach and building sentiment that there is more than just hope with hard work and dedication, Obama has nurtured a dependency generation that practices taking advantage of government entitlements, handouts and other federally funded programs. Not only does this mean 48 percent of federal spending—the highest percentage in American history—is dedicated to entitlements, but it also gives people the sense that employment isn’t necessary to live a stable life. Unemployment benefits and the like have fostered a generation living off of government handouts, who don’t feel they need to be working. According to the Bureau of Labor Statistics, the percentage of capable people that want to work (or are working) is the lowest it has been in many years. In U.S. history, a healthy labor participation rate is around 68 percent. As of September, the participation rate is down almost 5 percent, to an astoundingly low 63.6 percent. This also skews the unemployment rate, as the unemployment rate illustrates the percentage of people that want to find work, but cannot. Because there are fewer people looking for work (who are instead relying on the government), the unemployment statistics seem better than they really are.
Because the next presidential election will have a huge impact on job creation and thus on everyday life, voters should take the job policies into account, and realize that even if Obama’s track record says otherwise, the economy and job market are in a very poor state. Even if job creation isn’t the focus, Romney’s job plan makes more sense overall and has better prospects for the future.
There is no topic that has come up as frequently this presidential election as the economy and, more specifically job creation, as both sides try to win over a population skeptical of the current economic situation. Mitt Romney’s campaign claims he will create “12 million new jobs” in the next four years through tax cuts for corporations and spending cuts on healthcare and other programs. While an enticing idea to voters in these rough economic times, Romney’s promise is unfortunately unrealistic and implausible. Experts agree there is no situation in which Romney’s plan will directly create 12 million jobs in the next four years. The Obama administration, on the other hand, has posted 21 consecutive months of job growth and has done as best as can possibly be expected in the face of an uncooperative legislature and a full-scale financial crisis.
On multiple occasions Romney has proposed the figure of 12 million jobs that will be created if he is elected. Considering there are right around 12 million people that are currently unemployed according to the Oct. 5 employment report, this promise is particularly uplifting. His justification revolves around the implementation of his notoriously vague five-point plan, yet has yet to support this with concrete policies. Romney claims his energy policy will create 3 million jobs, his tax plan will result in 7 million jobs and his “crackdown” on China will create another 2 million jobs. Yet when reading through his official policy proposals it is difficult to find anything definite with regards to how these different numbers will be achieved.
What is true, however, is that a number of outside sources have predicted the creation of 12 million jobs in the next four year regardless of who is in office. So essentially Romney is taking figures that would result from normal economic growth and claiming them as a direct outcome of murky policies he has yet to actually come out with.
In the absence of a particularly impressive plan for the economy, Romney supporters tend to point to the “failures” of Obama’s administration and the disappointing growth in the past four years. Admittedly, the current 7.8 percent unemployment rate leaves something to be desired, but as a recent study by two Harvard professors pointed out, in the wake of a systemic banking crisis like the one America experienced, a deep recession is practically unavoidable (Reinhart and Rogoff, 2012). In fact, the study points out, the United States has been faring better than other advanced nations who recently faced similar banking crises in terms of the effect on the per capita GDP. So while it is true that the economy has not been doing particularly spectacular, but this is not Obama’s fault, rather the result of a financial collapse that occurred before he even came into office.
Obama inherited a difficult economic situation and has actually managed very well in the past four years to make positive progress towards ensuring more Americans have good, solid jobs given the circumstances. And even if one continues to believe he has done a poor job, Romney really isn’t bringing anything new to the table except wild, unfounded claims. Obama has shown us steady progress and promising legislation and for this reason he is the clear choice when it comes to the stronger candidate for the economy. Looking forward, the continuation of Obama’s policies will put us in the right place to experience the type of growth our country needs.