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.
That's the most idiotic proposal I've ever seen. It's a recipe for unlimited spending.
Every agency already runs to Congress every year looking to spend every penny they can lay their hands on. If the agencies get to make the spending decisions themselves, the already weak OMB and Congressional oversight checks evaporate.
His record is indisputably liberal. To say otherwise is to expose one as a sycophant in total avoidance of reality...and I hate to say it, but a danger to the conservative movement.
Right on, gal. But I afraid some of the FR are children that never grew up. Romney is right on with his suggestions. Something positive unlike the nitwits we have now. I surprises me how some small minds can harbor hate to the point that their minds are closed.
I’m glad Romney wasn’t the Republican nominee for President, but he would have made a decent Secretary of Treasury or Secretary of Commerce.
The difference is that Keyes has never done anything.
I voted for him once and sent him money, but when he started preaching black reparations, that was the end.
Like his proposal to give the power of the purse directly to the federal agencies?
Bureaucrat heaven.
Well son the reason is the his deeds don’t match his words. The words he hath spoken hear are right on target, but his record in political office do not match these words.
A social liberal big-government republican like Mitt just don’t cut mustard....regardless of the words he uses.
As for your point about "heckling," I will continue to vocally oppose those politicians whose programs I disagree with and support those with which I am in agreement. Should the GOP hang it up as a party? After the socialism of W. and the debacle of McCain, perhaps it is time to pull the plug on it and start fresh from basic conservative principles.
It's what Romney knows. The massive taxpayer funded bailout of the Olympic games Willard engineered was his original ticket to the national spotlight.
On the other hand Mitt has done a lot and when he was governor he was as far left on social issues as you can go and still be considered a republican, and he had a love of big-government boondoggles. No thanks. I’ll take a conservative who has conservative deeds to back it up.
He didn't propose that.
... and lost by larger margins. He was not trustes, less even than McCain. Be it his religion, his liberal past, or his smug, smarmy lack of appeal to Conservatives, he was handicapped far more than even McCain.
Wow...so Mitt is saying..someone other than those elected by the people. Sounds closer to communism than the liberalism his record shows.
Ummm... wouldn't it be more productive to look at his current porposals?
Like most Republicans nowadays, Romney doesn't have the power to "do" anything.
There are things Romney says in this opinion piece that are good. I welcome that.
I guess Ann Coulter and I (as well as many other conservatives like Mark Levin) are sycophants, and dangerous to the conservative movement then. At least I’m in good company. : )
Although Romney would later point to Staples as a key example of the kind of job-creating, forward-looking enterprise he made his living in, venture capital deals like Staples soon became only a small part of his firm's business, in favor of leveraged buyouts.
Venture deals invest in start-ups in the hope they hit it big. Leveraged buyouts combine small amounts of investors' money with large amounts of borrowed money to buy established companies.
Leveraged buyouts played to Bain Capital's analytical strengths and Romney's caution. If venture investing requires vision, leveraged buyouts demand precision. To determine how much to pay, and hence to borrow, buyout firms must figure out how much cash their targets can generate. Over8estimate cash flow by just a few percentage points, and the company misses debt payments and plunges into bankruptcy.
Despite the success of Staples, the venture capital world had too many unknowns for Romney's taste. So he steered the firm to focus squarely on leveraged buyouts.
"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." --Mitt Romney
The quote doesn't support your claim.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.