Paul Ryan's Full Employment Fantasia

Paul Ryan's Full Employment Fantasia
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One of the more enjoyable parts of the Ryan budget proposal is it's contention that, if enacted, it will "create nearly one million new private-sector jobs next year," and "bring the unemployment rate down to 4% by 2015." Which I guess makes sense? I mean, just think of all the people we'll need to build and maintain stables for unicorns! Here's Ryan Avent, though, casting doubt on all of Ryan's magic, like a muggle:

That sounds unbelievably good, and for good reason--the figures in the Heritage analysis are simply outlandish. According to the study cited above, Mr Ryan's plan will bring the unemployment rate down to 6.4% next year, 4.0% in 2015, and 2.8% in 2021. When the Obama administration projected a 5.9% unemployment rate in 2015 falling to 5.3% by the end of the decade, the Congressional Budget Office chided it for excessive optimism. The Federal Reserve has been indicating that the long-run unemployment rate in America is likely to be between 5.0% and 6.0%, and their estimate has risen over the past year. During the heady economic days of the late 1990s, the unemployment rate never got down to 4%. CORRECTION: Actually, the unemployment rate did dip just below 4% in 2000. I don't think anyone considers this a sustainable level of unemployment, however, and indeed, the first time the rate dipped below 4% the Fed responded with a 50 basis-point increase in the federal funds rate.

If you remember just how angry everyone was when the White House's more modest projections of 8% unemployment failed to materialize, Ryan has to be hoping that no one takes his plan seriously. (Of course, maybe Ryan is simply being "courageous.")

Matt Yglesias reacts: "2.8 percent in 2021! There no way of doing this short of shooting unemployed people in the back of the head." You watch what happens when all of the mass grave diggers want to form a union, though.

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