Politics

05.25.12

Romney's Revealing (semi-Keynesian) Slip

My pal Charles Pierce at Esquire sharply zeroed in on this little back-and-forth in Romney's big Time interview with Mark Halperin:

Halperin: Why not in the first year, if you’re elected — why not in 2013, go all the way and propose the kind of budget with spending restraints, that you’d like to see after four years in office?  Why not do it more quickly?

Romney: Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5%.  That is by definition throwing us into recession or depression.  So I’m not going to do that, of course.

Astonishing. There's even more in Romney's longer answer that Pierce didn't flag, which goes:

And I’d do it [balance the budget] in a way that does not have a huge reduction in the first year, but instead has an increasing reduction as time goes on, and given the growth of the economy, you don’t have a reduction in the overall scale of the GDP.  I don’t want to have us go into a recession in order to balance the budget.  I’d like to have us have high rates of growth at the same time we bring down federal spending, on, if you will, a ramp that’s affordable, but that does not cause us to enter into a economic decline.

Okay. First of all, Mittens Romney ain't balancing no budget, not with the hideous tax plan he's got, which will--again I say it--mushroom-cloud the deficit. The below is from Forbes, not exactly an Obama-friendly rag, from February:

Last week, Mitt Romney proposed a new tax plan that would, among other things, reduce individual tax rates by 20 percent across the board and repeal the Alternative Minimum Tax. To get a rough sense of what those two tax cuts would cost, the Tax Policy Centercrunched the numbers. The result: They would be really, really expensive.

TPC found that repealing the AMT and cutting rates by 20 percent would increase the deficit by more than $3 trillion over the next 10 years, even after the 2001/2003/2010 tax cuts are extended.

That last point made is important. Even assuming full extension of Bush tax cuts, which add their own $5 trillion or so to the deficit, Romney adds another $3 trill.

Okay but all that is a side point. What's astonishing is, here we have the GOP nominee admitting that what the GOP Congress has been doing for the past three years is wrecking the economy--acknowledging that cutting spending too fast leads to recession--or even (his word, not mine) depression. "A ramp that's affordable" is a euphemism for the idea that he doesn't want to cut spending too drastically and quickly because doing so has obvious consequences for the economy.

See, he was a governor, so he knows this. But in the fantasy factory known as Congress, Republicans deny this reality up and down.

This can be seen as making Romney seem like a normal planet Earth person who follows the normal rules of earthling logic, unlike most in his party. But the Democrats ought to be pressing this point and screaming about this contradiction: Republicans in Congress, you have denied for three years that cuts to government spending have any deliterious economic effect. Now your nominee admits as much--basically admitted that his own party has been trying to wreck the economy. What's your story, people?