Whee!!
Posted on 12/20/2008 3:09:04 PM PST by SeekAndFind
What is Washington waiting for? The inauguration is less than five weeks away: At the rate we’ve been going, another 500,000 jobs will be lost by then. The downward spiral is deepening and accelerating: Congress and the president must act now.
American families have lost about $11 trillion in net worth as securities and home values have plummeted. This translates into about $400 billion less annual consumer spending, net of government safety-net funding. Exports won’t grow to make this up, as the dollar has strengthened with investors worldwide clamoring for its relative security. Investments won’t make up the gap either, as bank loans and secondary-market financing have shrunk and as fresh equity is virtually non-existent.
So this is surely the time for economic stimulus. But — and this is the crucial point — the government can’t just make itself bigger and more oppressive in the guise of stimulating the economy. That would make matters worse. Nor should we forget that fiscal stimulus is but one part of the solution. As Christina Romer, Barack Obama’s designee as chairperson of the Council of Economic Advisors concluded from her study of the Great Depression, bad monetary policy was its greatest cause and good monetary policy was its most effective cure. The Fed should continue to expand the money supply. And, it should confirm that it will not tolerate deflation — the pain of inflation pales in comparison.
That being said, a stimulus plan is needed without further delay, and there are some things that Republicans should insist on.
The first is that tax cuts are part of the solution. Harvard professor and economist Greg Mankiw points out that recent research confirms that tax cuts have a greater multiplier effect than new spending — more economic bang for the federal buck. We should lower tax rates for middle-income families and eliminate their tax on savings altogether — no tax on interest, dividends or capital gains. Let’s also align our corporate tax rate with those of competing nations. These actions will rapidly expand consumption and investment, and right now, time is of the essence.
On the spending front, infrastructure projects should be a high priority. But because infrastructure projects involve engineering, environmental studies, permitting and contracting, they can take a long time to actually boost the economy. Spending to refurbish and modernize our military equipment is urgently needed, and it has a more immediate impact on the economy. A great deal of our armament was damaged or lost in the Middle East, and the rest is long overdue for maintenance.
We should also invest to free us from our dependence on foreign oil, not by playing venture capitalist, but by funding basic research in renewables, material science, combustion, nuclear reprocessing, and the like. During the 2008 campaign, virtually every candidate agreed on the need for an “Apollo-like mission” to achieve energy independence. Now is the time to start.
Cities and states will clamor for government dollars. Like the Big Three automakers, states should first take advantage of the downturn to do some needed cost cutting and restructuring. State employee numbers, pensions, and health-insurance premium sharing — as well as duplicate and ineffective agencies and programs — should be high on the hit list. State budgets should be brought in line with those of the most efficient of their comparables. And the federal government should look to ease the burden of mandates on states, like Medicaid.
Republicans should also lay down a gauntlet: All new spending projects should be selected by the responsible federal agency according to published criteria, not by congresspersons and senators based upon favors and politics. Republicans should commit to vote no on any stimulus bill with earmarks that have not been voted upon by their entire body.
There is a danger that new spending and deficits will lead to runaway inflation, flight from the dollar, and another economic crisis. It is essential, therefore, that Congress and the president commit to reform entitlement spending as soon as the economy recovers. With the footing of our long term economy at risk, with entitlements already reaching 60 percent of federal spending and with baby boomers nearing retirement, this can be delayed no longer.
We must also be careful to avoid burdening the economy with excessive regulation in response to the need to reform regulatory oversight of the financial sector. Going too far could cripple the entire industry, further tightening the credit markets. And we should make it clear that Washington will not act to virtually impose unions on small business by eliminating the right of workers to vote by secret ballot in the workplace. This “card check” payback for the AFL-CIO’s support of the Democrats would devastate business formation and employment.
The Democrats may want to wait for Obama, but the country needs action now. Republicans can — and must — play an important role in shaping a stimulus bill that makes sense for America and lays a foundation for future prosperity and growth.
--— Mitt Romney is the former governor of Massachusetts.
Its a damn good thing gas prices has gone down as fast as they have or people would be kicking the severed heads of politicians around like soccer balls.
Gas prices coming down is what is keeping the remaining bit of the economy going.
I read this as an affirmative that you voted for John McCain in the primaries. What a wonderful conservative you make.
Unlike you, I don’t support liberals, no.
Harvard professor and economist Greg Mankiw
is a keynesian. Give us a real economist please
Agreed...he is the only conservative out there right now expressing ideas that will get us out of this economic mess and is doing it will expressing conservative ideas...while Palin is pretty and is great on social issues, she isn’t able to express the economic fixes that are needed...
Do you hate women, too?
Jerk, I have a lot of admiration of Palin. Nothing I ever posted would indicate otherwise. If you choose to name-call at least do some research and base your rant on some resemblance of fact in what I wrote.
I also had the chance to watch Romney here in Massachusetts. I've listened to him a lot on radio stations where he got half a chance to speak his mind about views without distortions from the media. This is a state where conservatives are way outnumbered. He is far from the arch socialist and Antichrist promoted by many so called conservatives.
And perhaps get slaughtered for it?
I don’t think real regular FR’s would act like trolls.
I just don’t think Mitt is a leader. He may be a real good guy; but is not a leader.
I heard him, too, and going back to 1994 when I was there for his Senate campaign. He’s one of the biggest frauds and liars I’ve ever heard or seen, and that includes Bubba, too. It’s no surprise he did nothing but aide and abet the Democrat and Socialist cause, since he never was a Republican.
LOL.
EV is FR's most vigilant supporter of Alan Keyes. Has been for years.
You do realize that the power to select spending necessarily obligates appropriated funds for it?
For example DOD selects a tanker project. Congress allocates money for the tanker project.
No, agencies REQUEST funds for projects, run their requests through OMB examiners, negotiate for a share of anticipated appropriations, then take their negotiated proposals for spending to the President for possible inclusion in the President's budget proposal to Congress.
Romney, the Constitution hating socialist, proposed to give the spending selection powers to the agencies, your koolaid drinking spin notwithstanding.
Take a basic civics class.
Romney, the Constitution hating socialist, proposed to give the spending selection powers to the agencies, your koolaid drinking spin notwithstanding.
Apparently not.
Dope.
Just wait till he gives federal agencies the power to select to spend taxpayer dollars on projects promoting gay marriage.
Then he was just lying when he proposed giving agencies the power to select their own spending? Admittedly, Romney's word is worthless.
Hey, why would Slick Willard fight the liberal machine when he IS the liberal machine ? ;-)
Ignore Romney's past abdication to Democrats - check
Ignore Romney's appointment of corrupt, liberal pro-criminal judges, overlooking GOP candidates - check
Ignore Romney's ignoring Mass Constitution - check
Ignore Romney's wussiness to criticism using tears and fabricated 'religious persecution' - check
Ignore Romney's use of fake law enforcement officers (caught in two states) - check
Ignore Romney is the MSM's choice because they have files already prepared against him - check
Ignore Romney's coverup of the "Big Dig" for donations - check.
Ignore Romney's bankruptcy of Mass for his HillaryCARE=RomneyCARE - check.
Ignore Romney's targetting of other GOP candidates - check
Ignore Romney's decimation of Mass GOP and that he couldn't win Mass to Hillary -check
Ignore Romney's real impact on Massachusetts - check
Ignore Romney's federal bailout of the Olympics - check
Ignore Romney's begging for a federal bailout of RomneyCARE - check
Ignore Romney's use of the Mormon card and his CRYING like a baby to try to defect from his record or criticism - check
With his bailout budget mindset combined with with spending to be decided by unelected bureaucrats, Romney is fighting to out-liberal the liberals.
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