Experts differ on the logistics of candidates' plans for economy


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The No. 1 issue that American voters are worried about this election season is job creation, according to a U.S. News/Gallup Poll, yet one University of Iowa expert doesn’t believe either candidate has anything specific in mind that would have a major effect on increasing the number of jobs.

“I don’t mean that critically,” said Raymond Riezman, a UI economics professor. “I don’t think employment creation is really something that the president or the Congress has much to do with. It happens by the growth of the private sector. And it depends on market conditions all over the world.”

According to a monthly report by Bureau of Labor Statistics — which showed a 0.3 percent decrease in unemployment rate in September — employment growth has averaged 146,000 jobs per month, as opposed to 153,000 per month in 2011. But, these numbers don’t account for the number of jobs lost during the same period.

But both GOP presidential nominee Mitt Romney and President Obama have stressed their plans to increase employment numbers.

Romney’s 5-point plan — which claims it would create 12 million jobs — focuses on energy independence, corporate tax cuts, more fair trade agreements, reducing the deficit, and reforms in the education department as the answer. Romney has iterated during the debates that the U.S. government doesn’t play a role in job creation — the private sector does.

But one national tax expert refuses to acknowledge Romney’s policy proposal as a plan, branding it a mere set of ideas.

“Romney basically hasn’t put forward a plan,” Roberton Williams, senior fellow at the Tax Policy Center located in Washington D.C., said. “He wants to cut federal spending in ways that seem undoable. Not practical.”   

Obama believes employment needs to be bolstered in the manufacturing industry, and aims to create one million manufacturing jobs by 2016. He also wants to continue spending on renewable energy and education — something that his opponent wants to cut.

Riezman said both plans need to be looked at with great skepticism as there is a mismatch between the kind of jobs being created and the skills that people have.

“If jobs are created in one sector, that doesn’t mean anything. Maybe there are jobs being lost in another sector,” he said. “We are interested in the total. And we are interested in quality of jobs, which is not being discussed."

The other big issue that some economists and voters alike are worried about is the U.S. public debt that currently hovers just above $16 trillion.

The Tax Policy Center’s analysis of Obama’s budget proposal shows that, from 2013 to 2022, the public debt will decrease by $2.1 trillion — about three-fifths of this decrease will come from revenue earned from tax increases on higher income households and higher estate tax
But a local entrepreneur said the bigger problem is annual interest paid on the debt that, at normalized interest rates, would be in excess of $400 billion a year.

“The reality is, that we have been living on borrowed money in this nation for way too long,” Robert Gettemy, also a lecturer at UI Tippie School of Business, said. “It was the most predictable problem that we have ever had. If we don’t change the way we do things now, we are going to bury your generation.”

Gettemy ran as a Republican for Iowa’s 2nd Congressional District in 2010 but didn’t receive his party’s nomination. He supports Romney’s plan to bring the federal spending down to 20 percent of GDP in the first year and subsequently cut spending across board, except for defense, by $500 billion.

Sen. Tom Harkin, D-Iowa, in a brief interview with The Daily Iowan said the Romney-Ryan plan wants to gut Medicare and privatize Social Security and therefore cripple the lower and middle class.
Riezman said while he likes the goals that Romney’s plan sets, immediate large-scale spending cuts would hurt a slow growing economy.

“I think that is a realistic target, but not in four years,” he said. “If you look at defense, which he has taken off the table; social security, which he claims he is not going to cut, and Medicare, you’ve got something like sixty to seventy percent of the budget. So if you are taking 70 percent off the table, what are you going to cut?”

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