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Romney Argues Big Spending Cuts Would Cause 'Depression,
Republican House Speaker John Boehner and GOP Presidential nominee Mitt Romney have, in the course of the past week, pushed starkly different approaches to fiscal policy and economic recovery, a window into a broader rift within the GOP between the Tea Party and less absolutist conservatives.
Boehner, carrying the Tea Party line on spending, recently said that he would insist that the deficit be cut by a dollar for every dollar increase in the debt limit, or else he would refuse to raise it, helping drive the country toward default.
"When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase," Boehner said.
"Dealing with our deficit and our debt would help create more economic growth in the United States," Boehner told George Stephanopolous Sunday on ABC's "This Week." "The issue is the debt."
Romney, however, said that pushing drastic spending cuts during shaky economic times is a prescription for "recession or depression."
Asked by Time's Mark Halperin Wednesday why he wouldn't push major cuts in his first year, Romney responded with reasoning that would be largely uncontroversial if not for the past two years' mainstreaming of an economic philosophy that insists government spending actually costs jobs, rather than creates job.
"Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5 percent. That is by definition throwing us into recession or depression. So I'm not going to do that, of course," Romney said in an answer picked up by former bank regulator William Black, a HuffPost blogger.
Boehner, by contrast, said cutting spending will spur the economy by giving "certainty" to the business community. "It would lift this cloud of uncertainty that's causing employers to wonder what's next. So dealing with our debt and our deficit are critically important," he said.
Any spending cuts, Romney said, should come down the road, after the economy has improved.
"I don't want to have us go into a recession in order to balance the budget," he said. "I'd like to have us have high rates of growth at the same time we bring down federal spending, on, if you will, a ramp that’s affordable, but that does not cause us to enter into a economic decline."
Romney's reasoning accepts the basic premise that government spending adds to GDP and leads to economic growth, at least during times when consumer spending and private-sector demand is down.
The economic assertion is supported by the post-recession job creation numbers. Under President Obama, government spending has grown at its slowest rate since the Eisenhower Administration, according to Politifact. Predictably, that has led to a slower recovery and -- ironically for a president who called for belt-tightening as a political response to the Tea Party -- political trouble for his reelection.
In fact, adjusting for inflation, Obama has actually cut spending by 0.1 percent, according to a Politifact analysis.
While rival schools of economic thought have never agreed on each other's fundamental principles, over the past several decades, the notion that more government spending helps during a recession had gained broad acceptance. But it has been rejected by Tea Party members of Congress and conservative interest groups like the Club for Growth, who have bemoaned Obama's stimulus package and other efforts to boost the economy as job-killing government spending. Club for Growth declined to comment for this article.
The rhetorical thrust of a sharp distinction between the Tea Party's demand for big cuts and Obama's supposed propensity to spend has been a central tenet of the GOP's political messaging over the past two years. And Romney has run afoul of budget-cut purists before, recently over comments he made during a campaign stop in Michigan.
"If you just cut, if all you're thinking about doing is cutting spending, as you cut spending you'll slow down the economy," Romney said, according to MSNBC.
That comment prompted this response from Club for Growth lobbyist Andy Roth: "It's hogwash. It confirms yet again that Romney is not a limited government conservative."
But with Romney now the Republican Party's presumptive nominee for president, anti-government-spending groups are largely holding their fire. Dan Mitchell, senior fellow at the libertarian Cato Institute, told HuffPost that while many at his organization would prefer a "slash and burn" approach to federal spending, they could still accept the "glide path" proposed by Romney -- even if it does rely on "Keynesian" reasoning.
"Big spending cuts would be great," Mitchell said. "So Romney's rhetoric is worrisome. But if he is willing to restrain the growth of spending, so that it grows slower than the private sector, that would be a modest step in the right direction."
House Republicans -- as indicated by rhetoric like Boehner's -- seem less eager to compromise.
http://www.huffingtonpost.com/2012/05/25/romney-spending-cuts-depression-tea-party_n_1545933.html
Boehner, carrying the Tea Party line on spending, recently said that he would insist that the deficit be cut by a dollar for every dollar increase in the debt limit, or else he would refuse to raise it, helping drive the country toward default.
"When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase," Boehner said.
"Dealing with our deficit and our debt would help create more economic growth in the United States," Boehner told George Stephanopolous Sunday on ABC's "This Week." "The issue is the debt."
Romney, however, said that pushing drastic spending cuts during shaky economic times is a prescription for "recession or depression."
Asked by Time's Mark Halperin Wednesday why he wouldn't push major cuts in his first year, Romney responded with reasoning that would be largely uncontroversial if not for the past two years' mainstreaming of an economic philosophy that insists government spending actually costs jobs, rather than creates job.
"Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5 percent. That is by definition throwing us into recession or depression. So I'm not going to do that, of course," Romney said in an answer picked up by former bank regulator William Black, a HuffPost blogger.
Boehner, by contrast, said cutting spending will spur the economy by giving "certainty" to the business community. "It would lift this cloud of uncertainty that's causing employers to wonder what's next. So dealing with our debt and our deficit are critically important," he said.
Any spending cuts, Romney said, should come down the road, after the economy has improved.
"I don't want to have us go into a recession in order to balance the budget," he said. "I'd like to have us have high rates of growth at the same time we bring down federal spending, on, if you will, a ramp that’s affordable, but that does not cause us to enter into a economic decline."
Romney's reasoning accepts the basic premise that government spending adds to GDP and leads to economic growth, at least during times when consumer spending and private-sector demand is down.
The economic assertion is supported by the post-recession job creation numbers. Under President Obama, government spending has grown at its slowest rate since the Eisenhower Administration, according to Politifact. Predictably, that has led to a slower recovery and -- ironically for a president who called for belt-tightening as a political response to the Tea Party -- political trouble for his reelection.
In fact, adjusting for inflation, Obama has actually cut spending by 0.1 percent, according to a Politifact analysis.
While rival schools of economic thought have never agreed on each other's fundamental principles, over the past several decades, the notion that more government spending helps during a recession had gained broad acceptance. But it has been rejected by Tea Party members of Congress and conservative interest groups like the Club for Growth, who have bemoaned Obama's stimulus package and other efforts to boost the economy as job-killing government spending. Club for Growth declined to comment for this article.
The rhetorical thrust of a sharp distinction between the Tea Party's demand for big cuts and Obama's supposed propensity to spend has been a central tenet of the GOP's political messaging over the past two years. And Romney has run afoul of budget-cut purists before, recently over comments he made during a campaign stop in Michigan.
"If you just cut, if all you're thinking about doing is cutting spending, as you cut spending you'll slow down the economy," Romney said, according to MSNBC.
That comment prompted this response from Club for Growth lobbyist Andy Roth: "It's hogwash. It confirms yet again that Romney is not a limited government conservative."
But with Romney now the Republican Party's presumptive nominee for president, anti-government-spending groups are largely holding their fire. Dan Mitchell, senior fellow at the libertarian Cato Institute, told HuffPost that while many at his organization would prefer a "slash and burn" approach to federal spending, they could still accept the "glide path" proposed by Romney -- even if it does rely on "Keynesian" reasoning.
"Big spending cuts would be great," Mitchell said. "So Romney's rhetoric is worrisome. But if he is willing to restrain the growth of spending, so that it grows slower than the private sector, that would be a modest step in the right direction."
House Republicans -- as indicated by rhetoric like Boehner's -- seem less eager to compromise.
http://www.huffingtonpost.com/2012/05/25/romney-spending-cuts-depression-tea-party_n_1545933.html
Rock bottom. I think you're right. Like an addict, I think we have to hit rock bottom. As individuals, we all have a different "rock bottom". But as a country, how bad does it need to be if this isn't rock bottom?
I remember lean times as a kid. I can't compare them to what I am experiencing now. I was a kid and didn't have the depth to fully understand what was happening with the family finances. As an adult and sharing the financial responsibilities with my wife, I fully understand what we can and cannot get away with.
When I lost my previous job, we tried to live on credit. In fact, it was necessary for a while... until I could get more gainful employment. The simple fact was, that was our "rock bottom" and the recovery hasn't been easy. We're almost out of the hole, but we went without some of the finer things.... and that's okay.
We have some friends that are living way beyond their means right now. Not only are they living and "playing" on their credit cards, they've created a life style that is 100% dependent on a "housing allowance" that is about ready to be cut from their work benefit packages. (This housing allowance equals an additional $1400 a month to their salaries.) (This housing allowance was enacted because the cost of living is so expensive here. Housing is horribly expensive, so county and town employees have been given this stipend to keep them housed.... problem with that is, most of these employee's moved out of the valley where rent/mortgages are about 1/2. These people, by and large, are using this stipend as a luxury....spending it at will. If this benefit goes away, people are talking about moving away and letting their affordable housing go into foreclosure.)
I was talking to my friend and he said they had no idea what they were going to do without that. I told him, "welcome back to earth"! This guy is not in touch with reality.... it's unfortunate for them but they have been living the "high life" well beyond their means and it is going to bite them in the hind end.
I remember lean times as a kid. I can't compare them to what I am experiencing now. I was a kid and didn't have the depth to fully understand what was happening with the family finances. As an adult and sharing the financial responsibilities with my wife, I fully understand what we can and cannot get away with.
When I lost my previous job, we tried to live on credit. In fact, it was necessary for a while... until I could get more gainful employment. The simple fact was, that was our "rock bottom" and the recovery hasn't been easy. We're almost out of the hole, but we went without some of the finer things.... and that's okay.
We have some friends that are living way beyond their means right now. Not only are they living and "playing" on their credit cards, they've created a life style that is 100% dependent on a "housing allowance" that is about ready to be cut from their work benefit packages. (This housing allowance equals an additional $1400 a month to their salaries.) (This housing allowance was enacted because the cost of living is so expensive here. Housing is horribly expensive, so county and town employees have been given this stipend to keep them housed.... problem with that is, most of these employee's moved out of the valley where rent/mortgages are about 1/2. These people, by and large, are using this stipend as a luxury....spending it at will. If this benefit goes away, people are talking about moving away and letting their affordable housing go into foreclosure.)
I was talking to my friend and he said they had no idea what they were going to do without that. I told him, "welcome back to earth"! This guy is not in touch with reality.... it's unfortunate for them but they have been living the "high life" well beyond their means and it is going to bite them in the hind end.
‘My guess is he will be stepping back from this statement if he has not already done so.”
I don’t think so.
The “Party Line” for sure want like it. But I don’t think it really matters.
I’m noticing both them starting to use a little common sense by paying more attention to middle ground instead of solely catering to votes they already have secured. We all agree Republicans are voting Romney and Democrats are voting Obama, regardless of what they do.
A couple of years ago Obama wanted to end some Tax Breaks for companies that move Jobs Over Seas. I thought it was a great idea but he met resistance from both parties. So now he is willing to compromise by proposing a plan to close loopholes (this goes against the grain of Republicans, but they are not voting for him anyway) but lowering Cooperate Tax Rates from 35% to 28% and Manufactures to 25% (this goes against the grain of Democrats, but they are going to vote for him anyway).
Hopefully they both are sincere in meeting in the middle and not just playing Politics for the Swing Votes. If they are sincere, I’m finally starting to see glimpse of Hope.
I don’t think so.
The “Party Line” for sure want like it. But I don’t think it really matters.
I’m noticing both them starting to use a little common sense by paying more attention to middle ground instead of solely catering to votes they already have secured. We all agree Republicans are voting Romney and Democrats are voting Obama, regardless of what they do.
A couple of years ago Obama wanted to end some Tax Breaks for companies that move Jobs Over Seas. I thought it was a great idea but he met resistance from both parties. So now he is willing to compromise by proposing a plan to close loopholes (this goes against the grain of Republicans, but they are not voting for him anyway) but lowering Cooperate Tax Rates from 35% to 28% and Manufactures to 25% (this goes against the grain of Democrats, but they are going to vote for him anyway).
Hopefully they both are sincere in meeting in the middle and not just playing Politics for the Swing Votes. If they are sincere, I’m finally starting to see glimpse of Hope.
When it comes to budgets and such, they really should run it like the American citizen runs their household. Or maybe they have as many Americans are sunk by the debt the shamelessly incur. Living on credit is no way to live and I'd rather have a simple life with less than be so vulnerable.
That is not to say that we should go hot wild and slash slash slash. You have to do so responsibly.
I'm not a tea party person and oh so never will be but I'm conservative and think our country spending as if there is an endless supply of money and credit is going to have repercussions. Big ones.
I guess it is one of those things---- do you hit rock bottom and build from their or do you just slowly keep digging the whole until you do hit rock bottom? I don't know.
So, I would think that all are afraid at this point about which direction to go in.
*** One big thing I really really hate in politics is this as well. I know that as I grow older, wiser, new things are revealed to me, I can readjust my thinking on things. It's like politicians aren't allowed to. You make a statement and that is it. You are a stone cold lyer if you eventualy evolve into thinking something else or doing something else. This economy is so crazy that one day something may make perfect sense and the next, something may sound better. If our politicians aren't allowed to evolve their thinking, we are sunk!! AND, if they do indeed just say stuff to please certain voting groups, that is probably the definition of what is wrong with politicians.
Why do I want a leader? Because I want someone to lead. Not because I want them to fall in line behind behind a scary group of extreme people on one side or the other.
Okay, am now looking for the stair to get off this soap box!
That is not to say that we should go hot wild and slash slash slash. You have to do so responsibly.
I'm not a tea party person and oh so never will be but I'm conservative and think our country spending as if there is an endless supply of money and credit is going to have repercussions. Big ones.
I guess it is one of those things---- do you hit rock bottom and build from their or do you just slowly keep digging the whole until you do hit rock bottom? I don't know.
So, I would think that all are afraid at this point about which direction to go in.
*** One big thing I really really hate in politics is this as well. I know that as I grow older, wiser, new things are revealed to me, I can readjust my thinking on things. It's like politicians aren't allowed to. You make a statement and that is it. You are a stone cold lyer if you eventualy evolve into thinking something else or doing something else. This economy is so crazy that one day something may make perfect sense and the next, something may sound better. If our politicians aren't allowed to evolve their thinking, we are sunk!! AND, if they do indeed just say stuff to please certain voting groups, that is probably the definition of what is wrong with politicians.
Why do I want a leader? Because I want someone to lead. Not because I want them to fall in line behind behind a scary group of extreme people on one side or the other.
Okay, am now looking for the stair to get off this soap box!
I'm with you on that one, especially since he's been trying to tout himself as a constitutional conservative republican. They've got nobody else to prop up in that position, so I'd bet the coaching is in full swing after a statement like that.
My guess is he will be stepping back from this statement if he has not already done so. Partyline wont like this at all.
Here he goes softening up. (Not necessarily a bad thing.) I knew he'd drop some hard stands. That still does not make the guy appealing to vote for, though.
a common sense comment from Romney. Next thing you know he will be calling for a National Infrastructure Improvement Bill.
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