The House GOP’s tax-cut-heavy alternative stimulus plan may have failed this week, but they’ve become addicted to erroneously using past research by Dr. Christina Romer, the chair of President Obama’s Council of Economic Advisers.
House Minority Leader John Boehner (R-OH) and his crew have been claiming that Romer’s math proves their plan creates 6.2 million jobs — a crafty blurring of a 2007 paper by Romer and her husband, Berkeley economist Dr. David Romer. And Mitt Romney was at it again today during his speech to House Republicans at their retreat in Hot Springs, Virginia:
First, there are two ways you can put money into the economy, by spending more or by taxing less. But if it’s stimulus you want, taxing less works best. That’s why permanent tax cuts should be the centerpiece of the economic stimulus. Even Christine [sic] Romer, the President’s own choice to lead the Council of Economic Advisors, found in her research that tax cuts are twice as effective as new spending.
Sorry, Mitt — as Brad DeLong has pointed out, Romer’s paper never found that. You’re actually citing former George W. Bush economic adviser Greg Mankiw, who drew his own wacky conclusions by comparing two totally different studies, with different methodologies.
But if you want to use Christina Romer’s 2007 research as a model, that’s cool. Since she also found that “tax increases to reduce the deficit appear to have little negative impact on output,” can we roll back the Bush tax cuts now?