Romney’s remedial math on fixing the economy

>>> mitt romney is the artful dodger when it comes to providing specific details on how he plans to fix the economy, but it was bill clinton who cornered the candidate with just one word, arithmetic, arguing that his plan just doesn't add up. but if you dare call him out on it, watch out.

>> so i'm not going to send money to amtrak. i'm not going to send money to pbs. not going to send money to the national center -- or the national endowment for humanities and arts.

>> that doesn't add up to much, governor.

>> i'm happy to keep going, julie, okay?

>> as for middle class americans who believe that will translate into big tax cuts , well, mr. romney has some bad news for you.

>> by the way, don't be expecting a huge cut in taxes because i'm also going to lower deductions and exemptions, but by bringing rates down, we'll be able to let small businesses keep more of their money so they can hire more people.

>> jared bernstein is an msnbc contributor and former chief economic policy to the vice president. it's great to have you in person, jared . can you explain something to me because this sounds to me like a game of smoke and mirrors . on the one hand he says he's going to reduce everyone's taxes by 20%.

>> right.

>> on the other hand, he's going to cut deductions like what? he won't say. but let's assume he's going to cut things like the mortgage interest deduction , charitable contribution deduction, doesn't that mean ultimately we end up paying the same amount?

>> right. so, by the way, those tax cuts you just mentioned are an extremely difficult political lift, but put that aside for a minute. you're absolutely right. the problem that governor romney is having is with arithmetic in the following sense. he says he will do three things, cut tax rates 20%, as you said, keep the budget deficit from getting larger, and protect the middle class from any tax increases. well, look, if you're going to cut taxes and you're going to be revenue neutral about it, that is not increase the budget deficit , that means somebody is going to have to pay more to offset the fact that somebody is paying less.

>> and who is going to pay more?

>> well, what mitt romney initially said was that we will just -- we'll get that from the top 1%. we'll get that from wealthy folks. well, that's where the arithmetic comes in. if you look at all of the deductions, you sum them all up, every single tax deduction going to those high-end folk, they don't make up the difference. it's not enough to offset the rate cuts. so you'd have to go to the middle class .

>> okay. well, ryan and romney are fond of bragging about how they'll be tough on issues. once again we give you the candidate.

>> we'll also take medicaid as well as housing and food stamps , we'll take the dollars that are going in those programs, return them to the states where they'll grow at the rate of inflation or in the case of medicaid , inflation plus 1%. that saves a hundred billion dollars a year.

>> i'm sorry to be simple about this, but we currently have federal agency that is provide these. is he saying that every single state is somehow supposed to not only take on the burden of dispensing that money but also the burden of administering these programs?

>> yeah. he's talking about something called block grants , and that means that instead of the federal government reacting to a recession, for example, and expanding unemployment insurance , food stamps , the kinds of programs that he was just mentioning, it's now going to be a set amount of resources, a set amount of money every year. so when you hit a recession, what did we just see in the great recession? medicaid spending had to go way up, food stamps , unemployment insurance . he's telling you he's going to save billions of dollars by taking out the very important counter cyclical function, that is the ability of these programs to expand in recession. he's talking about really undermining the safety net .

>> so you're saying that it's not only incoherent arit matically, it's also callous psychological and socially.

>> that's very well put. it's carving a huge hole in our safety net .

>> okay. i want to ask you about the new jobs numbers that came out yesterday from the department of labor because it seems that we'd underestimated job growth by something like 386,000. does this mean, therefore, that this president has now replaced all of the jobs that were lost under his tenure during this recession?

>> right. i mean, what this tells you is that there has been now some slight net job gain under the president's tenure. i mean, i think it's a close call . frankly, you know, getting back to zero isn't exactly the kind of labor market that we need, but there's no --

>> except when you look at how the economy cratered then --

>> exactly.

>> -- this is an achievement, isn't it?

>> this is the thing i keep trying to explain to people. there's a big difference between sailing into a storm and sailing out of a storm when it comes to the economy's momentum, and these numbers do underscore the president's point that things are improving. i'd say too slowly, we need to do more to add to that job growth , but no question that directionally that's where you want to be headed.

>> jared bernstein, thank you so much, jared , for coming in to our studio.