The Economist on Romney’s Fiscal Policy

By James Kwak

It should be no surprise that I am voting for Barack Obama on Tuesday, despite all his flaws and failures of the past four years. There are just too many dimensions on which he is clearly preferable to Mitt Romney. One of the more important ones, on which I spent most of last year (writing White House Burning), is fiscal policy. And here, since anything I write will be dismissed by many readers as liberal propaganda, is The Economist on the topic:

“Yet far from being the voice of fiscal prudence, Mr Romney wants to start with huge tax cuts (which will disproportionately favour the wealthy), while dramatically increasing defence spending. Together those measures would add $7 trillion to the ten-year deficit. He would balance the books through eliminating loopholes (a good idea, but he will not specify which ones) and through savage cuts to programmes that help America’s poor (a bad idea, which will increase inequality still further). At least Mr Obama, although he distanced himself from Bowles-Simpson, has made it clear that any long-term solution has to involve both entitlement reform and tax rises. Mr Romney is still in the cloud-cuckoo-land of thinking you can do it entirely through spending cuts: the Republican even rejected a ratio of ten parts spending cuts to one part tax rises.”

That’s just about the same summary I would have written.

21 thoughts on “The Economist on Romney’s Fiscal Policy

  1. A lot of people didn’t have the foggiest idea I was talking about Rick Santorum in my last comment in a prior post. Neither do I expect the vast majority of illiterates of the American nation to get the point that taxes are in fact Government revenues, and a nation that doesn’t collect revenues that match its expenses is doomed. The only way that Republicans have differed themselves in fiscal policy is Republican’s answer to the problem is spending JUST AS MUCH as Democrats, only paying for it with debt instead of revenues. Well….. that and “redistributing” money from the poor to the wealthy.

    There was a book by Benjamin M. Friedman that came out in 1989 (literally 23 years ago) that explained all this:
    But if you’re an illiterate Teabagger who depends on listening to Glen Beck and Rush Limbaugh to lead you around by the nose like a circus monkey, all of the above is moot anyway.

  2. Except Bowles-Simpson was fatally flawed, and entitlement reform is about a 4th decimal place problem in the grand scheme of American economic reality. And the idea that the budget needs to be balanced should just be heartily ridiculed. Balancing the budget is a near sure-fire way to bring on a recession.

  3. Tax cuts for the rich, savage cuts to programs for the poor.

    Really fresh material.

    Is it savage for NYC’s politicians to use resources that could be directed at alleviating the suffering of poor New Yorkers without power, water and food, for running a marathon (because they’re ‘stuff white people like’)?

  4. Art galleries in Chelsea are wrecked, and Staten Island looks like a small A Bomb went through there, and the MAYOR thinks it’s a good idea to carry on with the marathon.

    I just got off the phone with my sister who lives in NYC, and she’s incredibly ticked off that such a poor decision was made by this little autocrat.

    NYC city HOTELS with power are just feeding in-house guests, and try finding gasoline, it’s complete havoc, and now add 47,000 runners to the mix.

  5. Do you have a Free Vote?

    You probably do. There are only a handful of states —
    Ohio, Florida, Virginia, Wisconson . . perhaps a couple of
    others — where politically aware people must really swallow
    hard and vote for the “lesser of two evils”(LOTE). For the
    rest of us — I’m speaking to and for politically aware
    people! — our vote doesn’t matter; it will have no effect
    on who the next president is.

    Politically aware people in CA, NY, IL, MD, WA, MN, MA, CT
    — also in TX, OK, UT, WY, and others — already know that
    their state is going to go for Obama — or for Romney.
    Their vote will have no effect in determining the next

    Politically aware people, whether liberal or conservative,
    should, in most states, vote their true preferences, rather
    than got the LOTE route. In most states they can safely
    do so.

    If FreeVote-ism should catch on, we in the United States
    would have a chance, over several presidential cycles,
    to claw back out of the miasma into which our politics have

    [ If you are unsure whether you have a Free Vote, a great
    site to check is . Polling results, by
    state, are up-dated daily. The site has a map, where states
    where one candidate is preferred over another by more than
    10 percentage points are colored either Deep Blue, or
    Bright Red. ]

    Mr Kwak probably won’t read the above advice, but I hope
    others will, and will follow it. Jull Stein, of the Green Party,
    is a good pick.

    Best wishes,

    Alan McConnell, in Silver Spring MD

  6. Mr. Kwak, Thanks for putting the quote from The Economist. It nails Romney well. A horror equal to Romney himself is the number of Republicans who refuse to see the truth about him, and will vote for him anyway. I’m hoping that the Senate stays as a Democrat majority, and the House goes Democrat too…one can dream…

  7. Rachel Maddow discussing Paul Ryan’s efforts to LIE to the American people about his vote on the stimulus package and LIE about many issues Paul Ryan speaks out of both sides of his mouth on. Including useless pork projects (paid for with federal debt) to his home district in Wisconsin. This is the guy Romney chose to help bring us fiscal responsibility??

  8. The world’s full of Neo-Liberal Primitives who are monetary and economically illiterate. You’d wonder why since John Maynard Keynes spelt out how to be literate over seventy five years ago. All that really matters in the first instance he argued was that we optimize and balance the amount of liquidity and illiquidity in an economy. The liquidity is active money that bounces through as many people’s pockets or checking accounts as possible. Illiquidity is money that’s withdrawn from this active use in the shape of savings and bank reserves to accomodate unforeseen future events and ensure the payments settlement system functions without hiccup.

    So on the one hand Neo-Liberal Primitives can stand and stare at private banks creating money from nothing to help optimize liquidity but when Federal government does it it’s anathema! But why? The only difference being that one creates the money with immediate indebtedness repayment conditions, or near immediate. The other creates it without indebtedness and a need to impose repayment conditions or illiquidity through taxation or bond issuance (a temporary side-lining of liquidity) only when inflation threatens.

    In addition there’s the failure to understand that illiquidity for the non-government domestic sector can’t come from private bank created money since taking the sector as a whole that money has to be repaid so there’s no net money, assets are cancelled out by liabilities on the private bank’s balance sheets. This means illiquidity for the domestic non-government sector can only be obtained by government deficit spending and/or from a surplus gained from exporting over importing.

  9. The only question to be answered for a second term of Obama is whether he, no longer concerned about a later re-election…, will become more true to his word on rebuilding America as promised; or, will he pull out the stops in drone warfare and intensify the process of building a National Security State that essentially by-passes and nullifies the spirit of the Constitution…if not the very working of its translation itself.
    Yes …we must choose Obama…; Romney is no option. But if we must have Obama…we must decide in the first few months…what our role will be in defending human rights and the American Constitution itself from insidious demise…and the regressive normalization of “failure to represent” true democratic reality (…forget ideals!).

  10. Creating money out of nothing is absurd. It’s impossible, though where it does occur – its always and only the predatorclass that benefits from this nefarious fiction.

    Moses Herzog is deadon. The ignorant idiots, gospel according to fox mind controlled idiots in redneck Amerika vote against their own interests because their lauded prophets and hero’s lie to the repeatedly and relentlessly on TV and in wingnut media covens. Dressing up in redwhiteandblue, pimping patriotic platitudes, pretending on TV to worship and follow thebabyjesus…. Obviously none of these idiots have ever read any of the teachings of the Nazerine, the master who preached and practiced a message of unconditional peace, tolerance, and love, (and there are no conditions in the unconditional part), turntheothercheek, and condemned the accumulation and adoration of earthly wealth and power – behold the Lillie’s of the field wingnut biiiiaaatches.

    If you want to advance the interests of the predatorclass, predatorclass oligarchs, fascists, and sociopath billionaires – vote for Romney. Sadly Amerika in the last decades is always left with the choice of thelesseroftwoevils (LOTE) – clearly that choice is Obama.

  11. there is only evil and Obama is just the latest “shape” we get to choose from. Rmoney or Obama, gosh aren’t we lucky, given such wonderful choices of “evil”. as if this or that “evil” was a better one. Our elites do give us choices, that much must be said.

    so, our choice is a) the Obama way or b) the Rmoney way. Choices, Choices. such wonderful choices. Evil in its’ various disguises. Evil, nonetheless, yet it is still evil.

  12. Excuse me. The only difference between Romney and Obama on fiscal matters is that Romney TELLS you what he’s gonna do. Obama just rigs the terms of debate- with his deficit commission and focus on deficit reduction- to reach the same conclusion. I, for one, do not find this difference enough to vote for the President’s re-election. Why should HE have job security?

  13. “At least Mr Obama, although he distanced himself from Bowles-Simpson, has made it clear that any long-term solution has to involve both entitlement reform and tax rises.”

    Mr. Obama knows full well that tax increases have no chance of passing this, or any other conceivable, Congress. And he certainly has shown no willingness to FIGHT for the 99%, which is what tax increases would require. All we are left with are his spending cut proposals. I mean, come on. They can’t even agree to let tax cuts expire!

    Just watch. If Obama is re-elected, tax increases will be round-filed and program cuts will be expedited. You heard it here first.

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