Expect another recession if Romney wins
Economists, pundits and Americans with a calculator have been racking their brains trying to figure out how to make Mitt Romney's budget numbers work. Romney's insistence that they "add up" based on nothing that involves math is not working for anyone but Romney and his loyal followers.
There is a simple truth that no amount of political spin can change, and that is the budget cuts Mitt Romney wants to implement will likely lead to another recession.
Economic advisor Glenn Hubbard laid out the Romney economic plan in the Wall Street Journal, stating that Romney's goal is to cap gross domestic product at 20 percent. That's 3 percent lower than what is it today, and represents cuts so massive, they will devastate the economy.
Romney is apparently aware of this, having called his own economic plan likely to cause a "recession or depression," in a Time magazine interview earlier this year.
People buying into the theory that decimating the safety net is somehow good for the overall economy may be forgetting that there are jobs attached to all those programs—4.1 million of them. They would all be gone under the Romney-Ryan budget.
"As far as the immediate future goes, Romney is promising austerity," says the New Yorker. "As we’ve seen in other developed countries over the past few years, the imposition of austerity policies can easily turn modest recoveries into renewed recessions. It has happened in the United Kingdom, Spain, and Italy."
But the austerity in Romney's budget is only aimed at the middle class and the poor. Under Mitt's plan, the wealthy will get more money than they have seen in decades, on the order of $496,115 for the wealthiest Americans, including Mitt Romney.
There are also unanswered questions about the Medicare voucher system Romney and running mate Paul Ryan would no doubt be eager to implement immediately. There is $2 trillion in transition costs associated with it. Neither candidate has explained where that money will come from. If you add that to Romney's $5 trillion in tax cuts, which pile on top of a full extension of the Bush tax cuts, and $2 trillion more in defense spending, there is a lot of explaining to do.
"Romney's plan has gone through several iterations, but through it all the basic contours and basic impracticality have stayed the same," according to the Atlantic. "This is all kinds of impossible. For one, the nonpartisan Tax Policy Center pointed out there aren't enough tax expenditures for the rich to pay for Romney's tax rate cuts for the rich—in other words, his plan couldn't help but reduce high-end taxes. Romney would have to either abandon his tax cuts for the rich, raise taxes on the middle class, or explode the deficit. The latter seemed most likely given Romney's refusal to name a single expenditure he would eliminate..."
Based on the past performance of Republican presidents, Romney will probably go ahead with his tax cuts for the top 1 percent, raise taxes on the middle class, and cut programs for the poor. This will not only make the gap between rich and poor much worse, it will cause another recession. When Romney's numbers come up short, and reputable studies have demonstrated, he will do what George W. Bush did and add it to the deficit.
Like most politicians, Mitt Romney is promising voters the moon and stars, because that's what they want to hear. But they are going to end up disappointed, because that's what they get when politicians make promises they know they can't keep.
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