Even if you disagree with every one of Mitt Romney’s policies, there’s a chance he’s still the best candidate to lift the economy in 2013.
That’s not because he has business experience. His work in private equity surely taught him important lessons, but his agenda is indistinguishable from that of career politician Paul Ryan. Nor is it because he’s demonstrated some special knowledge of what it takes to create jobs. Job growth in Massachusetts was notably slow under Romney’s tenure. It’s because if Romney is elected, Republicans won’t choose to crash the economy in 2013.
The Congressional Budget Office estimates that if Congress gridlocks this year — if it simply gets nothing done — the economy will take a $607 billion hit in 2013 as the Bush tax cuts expire, the payroll tax cut expires and assorted spending cuts kick in. Falling off that “fiscal cliff,” they predict, will throw us back into recession.
But it’s worse even than that: Speaker John Boehner has said that he will “welcome” the 2013 debt ceiling as an “action forcing event.” Translation: He wants another debt-ceiling showdown. According to Gallup, the last one led consumer confidence to fall by even more than it did after the collapse of Lehman Brothers. This debt-ceiling fight would be on top of the economic chaos Congress caused by pushing us over the fiscal cliff. It would be a Lehman-like event.
Miles Nadal, CEO of the marketing and communications firm MDC Partners, says that at a recent event with executives of more than 100 companies, the business leaders were panicked about this possibility and clear on the best outcome for the economy: “a Republican landslide.” Why? “Because anything that breaks the logjam is positive,” he says. “The quality of the leader is less relevant than the ability to break gridlock.”
There’s no reason to believe Romney could “break” gridlock. But there’s reason to believe he wouldn’t face it in the first place. Republicans control the House. They’re three seats from controlling the Senate — and, because this Senate election follows 2006, which was a wave election for Democrats, Republicans are defending 10 seats while Democrats are defending 23. It’s difficult to imagine a scenario in which Romney wins the White House and Republicans don’t control the House and Senate. On the other side, while it’s not impossible to imagine President Obama winning the White House and Democrats taking back the House, it’s unlikely.
Even if Romney and the Republicans exceed expectations, they’re not likely to reach 60 seats in the Senate. But they won’t need them. The major issues on the table are budgetary. That means they can be considered using the budget reconciliation process, which can’t be filibustered. So if Republicans can maintain party unity — and they usually can — they’ll be able to govern effectively. And there’s no way that they’ll permit the Bush tax cuts to expire or the debt ceiling to lapse. Investors, knowing that, would likely stop worrying about the debt ceiling the moment a Romney win became clear — and they’d be right to do so.
Now, Republicans could still push the economy into recession if they pass an immediate austerity budget that slashed spending in 2013. And, given Republican rhetoric about how slashing the size of government will lead to more growth because the confidence fairy will come out and persuade businesses to spend more, you might think that’s exactly what they’ll do.
But Romney, though he often buys into that sort of nonsense while criticizing Obama, knows better. Time magazine asked him about cutting spending in 2013. “If you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5 percent,” Romney said. “That is by definition throwing us into recession or depression. So I’m not going to do that, of course.” You couldn’t have gotten a clearer definition of Keynesian budgeting from Obama.
There’s a good chance that a Romney administration would extend both Bush and Obama’s tax cuts and delay the scheduled spending cuts. Congress would raise the debt ceiling after Romney promised congressional Republicans that he’d sign some variant of Paul Ryan’s budget as soon as it’s sent to him. Somewhere along the way, Romney would pass both more short-term tax cuts and a long-term transportation bill — something Republicans have been blocking under Obama — that doubles as an infrastructure package and includes, to secure Republican support, the Keystone XL oil pipeline.
Nor is it clear that this will come at the cost of harsh deficit reduction in coming years. There will almost certainly be deep spending cuts if Romney is president, but both the Romney and Ryan proposals include trillions of dollars in unpaid-for tax cuts and defense spending. If Republicans decide to assume that deep tax cuts will lead, through supply-side magic, to larger revenues, their deficit-reduction plans might well end up increasing the deficit over the next few years, even if it does so in a regressive way. Remember, wrote Business Insider’s Joe Weisenthal, “Republicans were pro-deficit, and pro-entitlement expansion under Bush and Reagan. Deficit cutting only became part of the party’s ideology under Obama.”
Compared to anything Obama is likely to get from a Republican House, that is, at least in the short term, a much more expansionary, Keynesian approach. But it’s also an awful precedent. In a sense, Republicans are holding a gun to the economy’s head and saying, “vote for us or the recovery gets it.”
That might well prove an effective political strategy: The more they say that they’re willing to let the debt ceiling expire and the economy run over the fiscal cliff, the more businesses will pull back and households will stop spending in order to make sure they have enough cash on hand to ride out another crisis. That will further depress the economy this year, making it more likely that Romney wins, and that Republicans embrace the smooth Keynesian glide path that they’re denying Obama.
We are seeing the logical conclusion of a system biased toward gridlock: The out-party benefits when the public feels that Washington is failing and it often has the power to make Washington fail. Which, arguably, leads to another unusual formulation: Even if you agree with Romney’s policies, it may be that voting for Obama, and delivering a clear verdict against the GOP’s economic brinksmanship, is the only way to break the cycle of gridlock going forward.
So which are you more worried about? The fiscal cliff and the debt ceiling? Or the political system?
Source
OP: Of course, what isn't stated here is that a Romney administration in the hands of a full blown GOP House and Senate would also send our country, morally and socially speaking, back to the Dark Ages. Our country is *already* filled with theocrats, misogynists, bigots, luddites, and homophobes, nearly all of whom are Republican. Putting them into complete power would be a disaster for our country, to say the least.
That’s not because he has business experience. His work in private equity surely taught him important lessons, but his agenda is indistinguishable from that of career politician Paul Ryan. Nor is it because he’s demonstrated some special knowledge of what it takes to create jobs. Job growth in Massachusetts was notably slow under Romney’s tenure. It’s because if Romney is elected, Republicans won’t choose to crash the economy in 2013.
The Congressional Budget Office estimates that if Congress gridlocks this year — if it simply gets nothing done — the economy will take a $607 billion hit in 2013 as the Bush tax cuts expire, the payroll tax cut expires and assorted spending cuts kick in. Falling off that “fiscal cliff,” they predict, will throw us back into recession.
But it’s worse even than that: Speaker John Boehner has said that he will “welcome” the 2013 debt ceiling as an “action forcing event.” Translation: He wants another debt-ceiling showdown. According to Gallup, the last one led consumer confidence to fall by even more than it did after the collapse of Lehman Brothers. This debt-ceiling fight would be on top of the economic chaos Congress caused by pushing us over the fiscal cliff. It would be a Lehman-like event.
Miles Nadal, CEO of the marketing and communications firm MDC Partners, says that at a recent event with executives of more than 100 companies, the business leaders were panicked about this possibility and clear on the best outcome for the economy: “a Republican landslide.” Why? “Because anything that breaks the logjam is positive,” he says. “The quality of the leader is less relevant than the ability to break gridlock.”
There’s no reason to believe Romney could “break” gridlock. But there’s reason to believe he wouldn’t face it in the first place. Republicans control the House. They’re three seats from controlling the Senate — and, because this Senate election follows 2006, which was a wave election for Democrats, Republicans are defending 10 seats while Democrats are defending 23. It’s difficult to imagine a scenario in which Romney wins the White House and Republicans don’t control the House and Senate. On the other side, while it’s not impossible to imagine President Obama winning the White House and Democrats taking back the House, it’s unlikely.
Even if Romney and the Republicans exceed expectations, they’re not likely to reach 60 seats in the Senate. But they won’t need them. The major issues on the table are budgetary. That means they can be considered using the budget reconciliation process, which can’t be filibustered. So if Republicans can maintain party unity — and they usually can — they’ll be able to govern effectively. And there’s no way that they’ll permit the Bush tax cuts to expire or the debt ceiling to lapse. Investors, knowing that, would likely stop worrying about the debt ceiling the moment a Romney win became clear — and they’d be right to do so.
Now, Republicans could still push the economy into recession if they pass an immediate austerity budget that slashed spending in 2013. And, given Republican rhetoric about how slashing the size of government will lead to more growth because the confidence fairy will come out and persuade businesses to spend more, you might think that’s exactly what they’ll do.
But Romney, though he often buys into that sort of nonsense while criticizing Obama, knows better. Time magazine asked him about cutting spending in 2013. “If you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5 percent,” Romney said. “That is by definition throwing us into recession or depression. So I’m not going to do that, of course.” You couldn’t have gotten a clearer definition of Keynesian budgeting from Obama.
There’s a good chance that a Romney administration would extend both Bush and Obama’s tax cuts and delay the scheduled spending cuts. Congress would raise the debt ceiling after Romney promised congressional Republicans that he’d sign some variant of Paul Ryan’s budget as soon as it’s sent to him. Somewhere along the way, Romney would pass both more short-term tax cuts and a long-term transportation bill — something Republicans have been blocking under Obama — that doubles as an infrastructure package and includes, to secure Republican support, the Keystone XL oil pipeline.
Nor is it clear that this will come at the cost of harsh deficit reduction in coming years. There will almost certainly be deep spending cuts if Romney is president, but both the Romney and Ryan proposals include trillions of dollars in unpaid-for tax cuts and defense spending. If Republicans decide to assume that deep tax cuts will lead, through supply-side magic, to larger revenues, their deficit-reduction plans might well end up increasing the deficit over the next few years, even if it does so in a regressive way. Remember, wrote Business Insider’s Joe Weisenthal, “Republicans were pro-deficit, and pro-entitlement expansion under Bush and Reagan. Deficit cutting only became part of the party’s ideology under Obama.”
Compared to anything Obama is likely to get from a Republican House, that is, at least in the short term, a much more expansionary, Keynesian approach. But it’s also an awful precedent. In a sense, Republicans are holding a gun to the economy’s head and saying, “vote for us or the recovery gets it.”
That might well prove an effective political strategy: The more they say that they’re willing to let the debt ceiling expire and the economy run over the fiscal cliff, the more businesses will pull back and households will stop spending in order to make sure they have enough cash on hand to ride out another crisis. That will further depress the economy this year, making it more likely that Romney wins, and that Republicans embrace the smooth Keynesian glide path that they’re denying Obama.
We are seeing the logical conclusion of a system biased toward gridlock: The out-party benefits when the public feels that Washington is failing and it often has the power to make Washington fail. Which, arguably, leads to another unusual formulation: Even if you agree with Romney’s policies, it may be that voting for Obama, and delivering a clear verdict against the GOP’s economic brinksmanship, is the only way to break the cycle of gridlock going forward.
So which are you more worried about? The fiscal cliff and the debt ceiling? Or the political system?
Source
OP: Of course, what isn't stated here is that a Romney administration in the hands of a full blown GOP House and Senate would also send our country, morally and socially speaking, back to the Dark Ages. Our country is *already* filled with theocrats, misogynists, bigots, luddites, and homophobes, nearly all of whom are Republican. Putting them into complete power would be a disaster for our country, to say the least.