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PolitiFact: Gingrich close on jobs statement, far off on money

The statement

If today's economy was rebounding at the rate of the "Reagan recovery," it would have created the equivalent of 25 million new jobs and raised federal revenue by $800 billion a year.

Newt Gingrich, Monday in a Republican presidential debate

The ruling

We'll address this claim in two parts.

Job creation statistics come from the federal Bureau of Labor Statistics. To get the net number of jobs created during a given time, you subtract the number of jobs held nationally at the starting point from the number of jobs held at the ending point.

Since Gingrich was talking about a "recovery," we figured it would be fair to start the clock at the low point of the jobs picture. January 1983, we think is a reasonable start date, with January 1989 as the closing date, since that's when President Ronald Reagan left office.

Using the BLS data, we found that the number of employed Americans grew from almost 89 million in January 1983, the start of the "Reagan recovery," to more than 107 million in January 1989, an increase of 18.2 million or about 20 percent.

We adjusted the 18.2 million increase in jobs to account for the fact that today's labor force is 31 percent bigger and came up with 24 million jobs — quite close to the 25 million Gingrich cited in the debate.

What about the money figure?

We looked at the historical tables for federal revenue produced by the Office of Management and Budget. Between fiscal year 1983 and fiscal year 1989, federal revenue climbed from about $600.6 billion to $991.1 billion. That's an increase of $390.5 billion.

We'll adjust this increase to fit the current size of federal receipts. We found that revenue has increased by 2.73 times since the mid 1980s. Adjusting for the increase in revenues since the mid 1980s, it works out to slightly less than $1.1 trillion.

But there's one more step — Gingrich had said that federal revenues had increased by today's equivalent of $800 billion per year. So if you divide the $1.1 trillion number by the six years it covered, you get roughly $178 billion per year — well below the $800 billion Gingrich cited.

So Gingrich got very close on the jobs number, but he was way off on the revenue. We'll call it Half True.

This ruling has been edited for print. For the full version — and to read other rulings — go to PolitiFact.com.

PolitiFact: Gingrich close on jobs statement, far off on money 06/15/11 [Last modified: Wednesday, June 15, 2011 10:27pm]
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