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Jobs Outlook Discouraging

At nearly $600 billion, the trade deficit is almost entirely attributable to the gaps in trade with China and on oil, and it is the single most significant drag on demand, growth and jobs creation.

If elected, Gov. Mitt Romney promises to tackle China's undervalued currency and other mercantilist policies and open up offshore and Alaskan oil reserves for development. These polices could quickly boost demand by cutting the trade deficit in half, create 5 million jobs and get the economy growing again.

Longer term, policies proposed by Romney to lower the trade deficit could profoundly affect the pace of growth, because export and import-competing industries spend at least four times as much on R&D as does the private business sector as a whole.

Cutting the trade deficit in half could easily increase U.S. R&D enough to boost U.S. GDP growth by one or two percentage points. A U.S. economy growing at 3% or 4% a year, instead of its current 2%, would have far more resources to address issues like health care, the solvency of social security, an adequate national defense, and space exploration.

Friday's jobs report offers more than dry numbers. Rather, it will reveal much about the progress accomplished -- and yet unrealized -- toward rehabilitating the economy and creating jobs. With the right policies, the economy can create four or five hundred thousand jobs a month, grow robustly and again offer Americans promising futures.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Professor Peter Morici, of the Robert H. Smith School of Business at the University of Maryland, is a recognized expert on economic policy and international economics. Prior to joining the university, he served as director of the Office of Economics at the U.S. International Trade Commission. He is the author of 18 books and monographs and has published widely in leading public policy and business journals, including the Harvard Business Review and Foreign Policy. Morici has lectured and offered executive programs at more than 100 institutions, including Columbia University, the Harvard Business School and Oxford University. His views are frequently featured on CNN, CBS, BBC, FOX, ABC, CNBC, NPR, NPB and national broadcast networks around the world.
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