You want a case for electing Mitt Romney? Here goes.
Deficits are good for the economy. And President Obama has dramatically increased deficits, right?
Ummmmm. Not so much. The problem with that, what everyone forgets, what Democrats don't get, what Republicans don't get, what media outlets don't get, is that the budgets for each year are passed in the previous year.
Everyone knows Bill Clinton balanced the federal budget for the first time in a generation. Want to know the previous President who got a balanced budget? It was Lyndon Johnson. Want to know the year it was done? 1969. Want to know who was in office in 1969? Richard Nixon.
Johnson got a balanced budget passed while he was still President. It took effect as he left office.
So, if you take the Bush budget out of the equation, and look at what Obama got passed, even including emergency additional expenditures in the stimulus, it wasn't all that much. In fact, it was less than President Bush. Either one. Less than Clinton (Bill didn't balance the budget until the last.) Less than President Reagan. Less than any other President in the last 3 decades. Here are the figures put together by Market Watch, not known for being anti-Republican. In fact, click on the chart, and you'll see the research.
That might make for a good campaign point, but it's lousy policy.
How about the more basic approach? Well, the budget deal everyone agreed to last year would have reduced the deficit more than it has been so far. The deal was that Democrats and Republicans would have to come to some sort of deal on cuts and/or spending decreases. If they didn't, straight, across the board, cuts in spending would happen. Everything would go. There would be some exceptions for widows and orphans and Marines. Basic keep-the-lights-on and keep-the-terrorists-out bare bones stuff. And the Bush era tax cuts would expire. So there would be your spending cuts and tax increases.
But now Republicans are saying they won't go along with all that. So Democrats, led by President Obama are insisting on it. A deal is a deal. Here's what the Congressional Budget Office, the non-partisan group of experts put together by Congress, says about it.
What would happen if lawmakers changed fiscal policy in late 2012 to remove or offset all of the policies that are scheduled to reduce the federal budget deficit by 5.1 per- cent of GDP between calendar years 2012 and 2013? In that case, CBO estimates, the growth of real GDP in calendar year 2013 would lie in a broad range around 4.4 percent, well above the 0.5 percent projected for 2013 under current law. However, eliminating or reducing the fiscal restraint scheduled to occur next year without imposing comparable restraint in future years would reduce output and income in the longer run relative to what would occur if the scheduled fiscal restraint remained in place.
Reducing the deficit later this year will pretty much blow away the economy.
Contrast that with what Romney promises. He wants to balance the budget by slashing taxes for the wealthy. Good luck with that balancing act.
Okay. Here's why the basic premise doesn't work.
Cutting the deficit will be a disaster if it is done this year. The deficit needs to come down. But the timing is more than important. Mitt Romney wants to cut the deficit now. Bad move. He wants to do it by vouchering Medicare and eliminating Medicaid. He wants to privatize Social Security and cut teachers out of classrooms. It isn't simply inhuman. It's dumb economics.
Deficits during recovery produce faster recovery. Deficits after recovery produce inflation. So if there isn't, by some miracle under a Romney burden, a recession, if the nation manages to stumble into a recovery anyway, he'll wait until that moment to ... slash taxes on the wealthy. A recessionary policy in a slow recover will be followed by a recovery policy after it is no longer necessary.
Pretty much the opposite of what works.
President Obama ought to have provided a much bigger stimulus. A lot of the federal increase was taken out of the economy by cutbacks at the local level. He may have done just that, increasing the size of the stimulus, if he had had the votes, thereby getting the economy to grow much faster. He didn't, so he didn't, so it didn't.
As it is, we're edging toward recovery because the lowering of the deficit wasn't even more severe. So relax. A vote for Obama is still your best bet for the future of the flag, and the Republic for which it stands.
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"Remember 2009 included the massive stimulus that represented the largest increase in history and was supposed to be a one-time event and not part of the run-rate. For a real 0% increase we should see 2010 go back to 2008 levels. "
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