Earlier today, the House of Representatives passed the Jumpstart Our Business Startups (JOBS) Act in overwhelming bipartisan fashion (390-23). The JOBS Act is a package of six bills, four of which had already passed the House, and all of which would lift or relax Securities and Exchange Commission rules. The bill is intended to make it easier for small businesses to go public. But as the Washington Post’s Ed O’Keefe notes, “despite its name, Republican leaders couldn’t say how many jobs the bill would help create.” Why? Because cutting red tape doesn’t address the fundamental plight of the U.S. economy: a deep and prolonged aggregate demand slump.

As of Jan. 2012, the U.S. economy had fewer jobs than in Jan. 2001. More than 11 million jobs would be needed to return the unemployment rate to its pre-recession level (5.0 percent). Full employment would not be reached until 2019 if January’s pace of hiring (243,000 jobs added) continues. And the February employment report—due out tomorrow—is projected to show a deceleration in hiring. As of the fourth quarter of 2011, actual economic output fell $883 billion (5.4 percent) below potential economic output. Mass underemployment and a gargantuan output gap can’t be chalked up to red tape—this affliction is the byproduct of the housing market imploding (dragging down with it personal consumption and real estate investment) and fiscal contraction at the state and local level.

Before the administration rolled out the American Jobs Act—which would have substantively accelerated economic recovery—EPI President Larry Mishel spelled out four criteria for evaluating jobs plans:

• Will the policy make a real difference in job creation in the next 24 months?
• Is the policy effective and efficient?
• How is the policy funded?
• Is the policy at the appropriate scale to produce a substantial number of jobs?

How does the JOBS Act stack up? Well, it won’t make a real difference in near-term hiring. There’s no cost, bang-per-buck, or funding mechanism to be evaluated, period. And rather than being of the wrong scale to produce a substantial number of jobs, the policy is on the wrong scale altogether (the supply side rather than the demand side).

In a divided Congress, bipartisanship is certainly necessary to meaningfully address the jobs crisis at hand, but bipartisan support is hardly a sufficient condition. Restoring full employment requires much more than titling an uncontroversial bill so its acronym spells ‘jobs’ – substantive job creation legislation must noticeably lower the unemployment rate. Unfortunately, the JOBS Act misses that mark altogether.