Mitt Romney joins France in rejecting austerity

The sad part is that the stupid on the right will make excuses for Mitt. The guy is so close to Obama its sick and the right continues to push him as the GOP front runner. He is a liberal and well documented liar. Why do the idiots continue to support this guy? He is not a conservitive.



You can almost hear the collective gasp from Ron Paul's loyal band of supporters.

Speaking Monday at a town hall style-meeting event in Cleveland, presumptive GOP presidential Mitt Romney plunged a fork into the idea that he could come around to embracing Mr. Paul's call for deep cuts in federal spending.

"My job is to get America back on track to have a balanced budget. Now I'm not going to cut $1 trillion in the first year," he said, distancing himself from Mr. Paul's (http://www.washingtontimes.com/blog/inside-politics/2011/oct/19/paul-time-cut-spending/) plan to slice more than a quarter of the estimated $3.8 trillion being spent by the the federal government.

Why not, someone in the crowd apparently asked, sparking a response from the former Massachusetts governor.
"The reason," he explained, "is taking a trillion dollars out of a $15 trillion economy would cause our economy to shrink [and] would put a lot of people out of work."

Mr. Paul proposed deeper cuts in federal spending than any of his rivals in the GOP nomination contest, rolling out a plan in October that called for $1 trillion in spending cuts during his year in office -- in part by closing federal agencies, attrition in the federal work force and ending the wars overseas.

"I think the easiest place to cut spending is overseas," Mr. Paul said at the time, reminding supporters that the nation has spent trillions in Iraq and Afghanistan. "It doesn’t make us safer. It doesn’t make us richer. It makes us poorer."

Mr. Romney has offered a much different fiscal vision, arguing that federal spending should be cut and spending capped at about 20 percent of GDP. It now stands at about 25 percent of GDP. He's also railed against proposed cuts to military spending, which accounts for more than 18 percent of national spending.

Speaking at a campaign stop last week in Portsmouth, Va., Mr. Romney said he will add new ships to the U.S. Navy, add new aircraft to the Air Force and add 100,000 active duty personnel.
http://www.washingtontimes.com/blog...ay/7/romney-rejects-ron-paul-style-austerity/

 

I read it all and find nothing wrong with his assessment.

 

People need to learn when austerity is intended to be used and not to be used. Mitt Romney correctly understands that austerity is not to be used when an economy is an anemic economic recovery, which is why he does not advocate for immediate and crippling spending cuts. Such policies are counterintuitive to economic growth. Spending cuts do not yield an increase in GDP, but a decrease in GDP. Tax increases certainly yield a decrease in GDP. Both policies are intended to prevent the creation of inflationary gaps, and hopefully, economic bubbles, not to improve a recovery from an economic downturn.

 

It should have been used in 2001 when Bush put his tax cuts into place. He needed to find that money from somewhere OTHER than Social Security. Austerity would have been a workable situation. Instead, he wanted to give handouts to private healthcare industry and defense contractors. But yeah, great fiscal conservatives those Republicans. Romney once again proves that their ideology is a lie and a joke.

 

The implication is that the more the government spend, the more prosperous is the nation. The government not spending $1 trillion may shrink the GDP calculation, but that's not the same as real economic growth which comes from real productivity, not government spending.

It comes as no surprise to me that Republicans are defending this. They love big spending government as much as any Democrat, so long as it's directed by Republicans.

 

Mitt the Flip in action again.

One week (to conservatives) he's all about cutting spending and supports Ryan's hack and slash budget.

Next week (to a broader audience) he's not going to cut a huge amount.

At the same time, he wants to slash revenues and ramp up spending on the military.

Sound familiar?

Do we really want to go thru the mistakes of the 2000s all over again?

 

And he's right, just like I said in every other thread re: austerity. There is a time and a place for it and it isn't during a recession or recovery. $3.67 TRILLION dollars in projected spending and some of you dolts want to act like that isn't an essential, integral and necessary part of economy.

 

I don't see where you think Romney is joining France by rejecting austerity. Ron Paul never like our military or our need to have a strong military--so that is no surprise that Paul would like to reduce if not eliminate our military expenditures, whereas Romney will make sure we have a strong military going forward (a strong conservative policy). Where did Mitt say he wouldn't cut some of our useless entitlement and social programs? Point that part out for me because sometimes I miss the exact quote the first time around.

 

Romney has no clue how government works on a national scale. The idea that he (or anyone) can run the federal government like Bain Capital is about as absurd a policy as I've ever seen.

He'd never make it past the first week and he'd be impeached and tossed out the fkn door.

 

Romney and Obama are like the old cat/buttered toast scenario. Tie them together and drop them from a height and they'll flip flop so fast that we can have a perpetual motion machine. That might even help solve the energy problems.

 

Well, actually, the Bush Tax Cuts should have been implemented, but only for about 1 year. Other than that, we should have avoided policies that disrupted the stability of the economy. The conflicts in Iraq and Afghanistan could have been solved through geopolitical posturing and diplomacy. Bush's and Congress' focus should have been on regulating the financial sector after this nation witnessed the collapse of the internet bubble and was on a path for a new asset bubble and financial crisis.

 

I don't think Mitt's comments made sense. Cutting a trillion in one year from the federal budget would only remove a trillion "from the economy" if it reduced our deficit for that year by a trillion since we would be borrowing a trillion less that year. So is he saying that in a 15 trillion economy, we need to borrow a trillion a year or the economy collapses?

I think cutting a trillion dollars from the deficit would be a good thing.

 

It would be, but since GDP calculations include government spending, people mistakenly believe spending equates to production. It's a fundamental flaw in the GDP calculation that benefits politicians who love nothing more than to spend wealth they didn't produce.

 

Austerity my butt!! Since when is removing a couple of layers of useless government-fat 'austerity?' These politicians are playing us all for fools.

 

Other than Ron Paul, no one has proposed any sort of plan that resembles the "austerity" the Europeans have put themselves through. So as far as the US goes, austerity is a myth.

 

I tend to think Romney would be an uber-conservative if elected, but there's just no tellin' with that guy.

 

Why would you assume that? He's campaigned to the right and governed in the middle most of his career.

 

Because he's campaigned harder to the right than any Republican nominee in history including Goldwater. So what if he moderates a little?

 

One must understand the multiplier effect to decipher Mitt's comments. The multiplier effect is what drives changes in spending, and changes in real GDP in the economy. I do not know the exact multiplier of the United States economy, nor will I state that any calculations I do are accurate on such a matter.

Lets just say for all intensive purposes that the multiplier effect is 1/(1-MPC). Based upon my analysis of BEA numbers, the current marginal propensity to consume is approximately 0.58. The marginal propensity to consume and the marginal propensity to save always add to 1. 1/(1-0.5= 2.38. A 2.38 multiplier will render a $2.38 trillion dollar decrease in real GDP over time. In this situation, the economy is static; there is no growth. Therefore, $15 trillion-$2.38 trillion= $12.620 trillion.

Now, an expansionary fiscal policy can counteract this negative increase in real GDP. Understanding that Romney is a Republican, that expansionary fiscal policy will be tax cuts. Taxes, unlike changes in spending, usually have a smaller multiplier effect. This is because tax cuts are assumed to be saved as well as spent.

Of course this is a dumbed down explanation of the economy and an educated hypothesis as to Romney's rationale behind his comments. I could be wrong.

 

This was unexpected.

WH to France: Don't end austerity measures

 

A seventy-five percent tax on the wealthiest individuals combined is an extreme measure that could seriously hamper economic growth, mainly because it is not a growth solution, but a severe austerity measure. Of course the Administration should advise them against it.

 

When I hear the word "austerity" what I see them talking about is cutting back spending, not raising taxes.

The US economy did great, averaging 4+% real annual economic growth, in the 1950s and 1960s with top tax rates in the 70-91% range. In doing so, the nation paid down a WWII debt that was proportionately bigger than the one we have now, from 120% to 33% of GDP.

Conservatives claimed the Clinton tax increase would harm the economy, yet it kicked ass, and was the most successful economy since the 1960s.

So you'd have to show me a lot more evidence than just say-so to convince me that a tax increase would "seriously hamper" the economy. History says otherwise.

 

It's both, a lot of folks see a wealth tax as the only chance Italy and Spain have to dig themselves out of the hole their in.

Seems like tax hikes are an odd thing to ascribe the success of the 90's to, sure it happened but surely you not going to make the leap to causality solely based on that?

Ditto for the converse.

 

Tax collections are relatively lower in Italy Spain and Greece than Germany. Cutting spending too fast puts more people on the unemployment lines.

I think you misread my post. I referred to the success of the 1950s, 60s, and 90s as examples were the economy did better under higher tax rates to refute the claim that raising taxes is harmful the economy.

It proves there is no absolute correlation between lower taxes and greater economic performance, and suggests that tax rates (to a point) have little effect on the economy.

But they have a huge effect on the budget.

I made no such claim.

 

There is a reason for the success of the Clinton tax increase, and it has nothing to do with the tax increase itself. In addition to a likely recovery independent of government policy, government spending increases helped bring the economy out of the early 1990's recession. A tax increase in of itself does not yield economic growth. It actually takes money out of the economy, not something one wants to do during a recession. A government spending increase that yields a greater increase in real GDP than a tax increase decreases real GDP is a viable policy if intended to increase aggregate demand. The same principles apply to the Great Depression as well as the 1950's and 1960's.

Therefore, I would not call a tax increase coupled with increased government spending a bad approach, but a diminished Keynesian expansionary fiscal policy. It is, however, the more fiscally responsible means of economic growth. A true adherent to Keynesianism would advocate for tax cuts and spending increases to deal with a recession.