An alternative explanation, I suppose, would be that Mitt Romney is familiar with federal law
(specifically, the Full Employment and Balanced Growth Act of 1978). )
Either way, good for him. (h/t lambert)
The TC rule right now says – it screams – “WE NEED MORE SPENDING”…. The rule itself is pretty simple. It uses our two biggest concerns of employment and inflation, and sets targets for them. It also accounts for population growth, so we can keep per capita GDP growing…
The rule itself is pretty simple. It uses our two biggest concerns of employment and inflation, and sets targets for them. It also accounts for population growth, so we can keep per capita GDP growing.
I suggest using 4% for an unemployment target.
May 4 (Bloomberg) — Mitt Romney raised the bar for what comprises an unemployment rate worth celebrating as he used the latest jobs figures to criticize President Barack Obama’s management of the economy while campaigning in Pennsylvania.
“Anything over four percent is not cause for celebration,” the presumptive Republican presidential nominee said inside a warehouse of a specialized cement and corrosion- resistant materials manufacturer in Pittsburgh.
The medium-term goals in the first three Economic Reports and… in each Economic Report thereafter shall include… reducing the rate of unemployment, as set forth pursuant to section 1022(d) of this title, to not more than… 4 per centum. 15 USC 1022a(b)
One of the mysteries of government is why Congress lets the CBO (which works for Congress!) piss all over an Act of Congress by using 5.2% as the target full employment U3 rate. The difference between 4% and 5.2% is approximately $300 billion in economic activity. To put it another way, whenever you hear economists drone about the output gap, mentally add $300B to the total.
Update: Like clockwork, a former CBO director defends his own neglect of federal law by…. blaming Romney.
A leading conservative economist took issue with Mitt Romney’s claim that, “anything over four percent [unemployment] is nothing to celebrate.”
“I understand the desire for low unemployment and the current 8.1 is unacceptable,” Douglas Holtz-Eakin, president of the American Action Forum told TPM via email Friday afternoon. “But 4% is not a realistic target.”
Update II: From what critics are saying (e tu, Krugman?) you’d think Romney was endorsing a crazy impossible pipedream, like, say, (1) landing a man on the Moon and (2) returning him safely to the Earth (I shudder to think how the Fed would balance THAT dual mandate). In fact, the 4% target has been reached as recently as the Clinton administration; U3 rate bottomed out at 3.8% in the spring of 2000, without accelerating inflation.