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.
1. "This is time for economic stimulus,"
Introductory paragraph, which you dismiss because you "expect it's stimulus directed by coercive government instead of free markets, free wills, and self-interest." Sorry, bud, but that's just you projecting. The rest of the op-ed is his proposal in outline. Do you think we are not in need of a stimulus?
2. Romney recommends that "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." When in doubt, print more money.
I agree with you. Inflating the money supply is not what we need. Getting bad debt out of it is what we need.
3. "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. "
So, something you agree with, but refuse to credit because you think it not enough. But, eliminating taxes on dividends, cap gains and savings interest would benefit all classes.
4. He talks about the need to "spend" on infrastructure and modernizing military equipment, observes that environmental and other regulations make infrastructure spending a slow returner
Another point you basically agree with, right?
5. Romney says, "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..." Inquiring minds want to know, "invest" with whose money??? And THIS inquiring mind believes ... It is a myth, and Romney embraces the myth.
Again, you project. Romney suggests funding basic research, and specifically mentions nuke and combustion efficiencies. Energy independence for America is a worthwhile goal, that would reduce the ability of foreign govts, oil market speculators and OPEC to manipulate our economy.
While you might argue that such research should be private sector only, I'd rather see it than GM and the UAW getting money.
6. " ... states should first take advantage of the downturn to do some needed cost cutting and restructuring,"
Another you basically agree with, but dismiss as "obvious". If it's so obvious, why haven't the other Fed plans been highlighting it? CA could certainly use some downsizing and restructuring. Instead, it's seeking a bailout.
7. "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." In other words, putting the government fox in charge of the henhouse is smarter than putting elected representatives in charge of it.
To me, it's just a choice between the fox and the weasel. I'd like a more fleshed out proposal on this, before replacing earmarking reps with empire building bureaucrats. Perhaps a good check and balance between the two branches instead of trusting one or the other (what a concept).
8. Romney says: "It is essential ... that Congress and the president commit to reform entitlement spending as soon as the economy recovers. With ... entitlements already reaching 60 percent of federal spending ... this can be delayed no longer."
9. Romney says, 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 .... 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 ...."
So, two more you agree with, but dismiss because of whom is saying the words.
What elements do you think are needed for a good GOP proposed stimulus package, that Romney did not include? How would you modify the above proposals that you agree with, but think flawed?
Because what he's said and what he's done are often diamterically opposed. The man is a snake-oil salesman.
No.
Three things.
Mitt isn't in power to do anything right now. The election is four years off. What is needed right now are voices in opposition to Obama making the case in public why Obama is wrong. In this case what is more important right now are comments about what Mitt says in opposition to Obama.
About Mitt and 2012 since you, others (and Mitt) are so inclined to think about that I myself would prefer a new candidate so we don't get the same kind of crackup that we got in 2008. Mitt of course is not a new candidate.
About your characterization of Mitt, it is more accurate to say that what Mitt says now and what he did in the past in Massachusetts are in many cases opposed. My description implies a (late)change in Mitt's political positions. That is different and more accurate than your characterization which implies that he talks one way and then he governs a different way. That is not the case.
No and no again.
Two things.
There are more than a few posters on this thread who are neither mesmerized by Mitt nor at this point in time are supporting Mitt for President in 2012. Perhaps you are amazed by some posters because you don't understand their point.
About Mitt being a political class charlatan I would say that most politicians give that appearance. Even the guy I was for in 2008 Fred Thompson took some less than conservative positions in the past and then changed his positions afterward to become more conservative.
What really hurt Romney were his flip-flops and insincerity. What statements Romney makes now, you could find him saying the exact opposite in the past. During the primary, Huckabee and McCain were able to deflect criticisms from Romney by drawing attention to his flip-flops. Huckabee referred to Romney as the candidate of change; As in changing his positions every five weeks.
My advice to Romney would be for him to stick with his positions he took during the 2008 primary and not deviate from them for the next four years. His biggest obstacle is proving himself sincere in his change of heart on a host of issues.
“There was no group that Romney could pick up ...”
Sure there are, people who want someone who actually articulates and support broad-based tax-cut economics ...
“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.” - Mitt Romney
You mean that very same group he would have lost when he also came out very publicly for the bail-outs?
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