Mitt Romney is looking to unseat Barack Obama to become the next President of the United States. The reason he thinks people should vote for him is that he made a lot of money in business, and that as a successful businessman, he must have what it takes to get America’s economy moving again and put this recession behind us. In fact, this experience is probably his strongest card.
The problem is his experience does not apply.
What Romney did so successfully at Bain Capital, was to make a lot of rich people, including himself, much richer. Fine for them, but the problem with the American economy today is not that rich people aren’t rich enough.
In fact, the problem with the American economy is that wealth has become far too concentrated in the hands of a very few at the top. This has come about largely as the result of government policies started back in the Reagan era, policies that Romney says that if he’s elected he will not only continue, but extend.
First, by focusing on the deficit instead of employment he will cut spending. While that sounds very responsible, it won’t work. When no one else is spending, the government has to, or else the economy will grind to a halt. No one said the government has to spend money on making itself bigger, which is what conservatives are afraid will happen. The money should be spent on infrastructure, which will improve our quality of life and get people working again at the same time. According to the Economic Policy Institute, the Romney-Ryan economic plan would cost American a net 4.1 million jobs. On the other hand, Obama’s plan to continue the stimulus will get 1.5 million more people working. All those people who are going back to work will have more cash to spend, which means they’ll further boost the economy. They will also start paying taxes.
Speaking of taxes, Romney, if elected, will cut taxes further for the wealthiest Americans, exacerbating the deficit, while actually increasing taxes for the middle class. This would continue the trend of wealth redistribution from the poor to the rich reminiscent of feudal times (before Robin Hood came on the scene.)
The problem with this plan is that not only is it patently unfair, but it is also bad economics. If you give $5 million to one person, chances are they might spend a small portion of it at home, spend a bunch overseas, and put the rest away in savings. But if you divided that same $5 million, giving 100 people $50,000 each to live on, chances are that they would spend just about all of it on basic living expenses, much of which would be spent locally. It’s the flow of money, not the mere existence of it that makes an economy go.
Obama, on the other hand, will reduce taxes on the middle class, while increasing them on the wealthiest Americans, who use the infrastructure disproportionately and can well afford to pay for it. (Of course they will scream bloody murder, but they need to be reminded of the “good old” fifties and sixties, times of great national prosperity, when top tax rates were between 70-90 percent.) The middle class is where the economy needs the shot in the arm and President Obama is planning to administer it.
Romney plans to replace Medicare with a voucher system, shifting the risk away from his friends in the insurance industry and onto the backs of seniors. Obama has fought hard against stiff resistance to make health care available and affordable to more people than ever. And while he didn’t get everything he wanted in the final healthcare bill, it’s a big improvement over what we had before.
Romney also wants to increase military spending because that’s what Republicans do, despite the deficit and despite the fact that the Pentagon says that they don’t need more money with two wars ending. Does anyone remember the peace dividend? Obama has kept his promise to end the wars and is far more likely to use peaceful means to settle disputes in the future than the hot-tempered Romney, who is always looking for ways to ingratiate himself with those on the far right.
And speaking of the far right, Wayne Swan, the Australian treasurer, recently named Euromoney magazine’s finance minister of the year for keeping Australia’s economy out of recession, expressed concerns about the fiscal extremism of today’s Republican party. “Let’s be blunt,” he said, “and acknowledge the biggest threat to the world’s biggest economy are the cranks and crazies that have taken over the Republican party… Despite President Obama’s goodwill and strong efforts, the national interest was held hostage by the rise of the extreme Tea Party wing of the Republican party.” Imagine what kind of damage they could do if the President was on their side.
Which brings us to the question of reform. The Wall Street money machine is hopelessly out of control with its wild speculative swings that put the entire world economy at risk. It is in need of serious reform, if not a complete overhaul. While it’s not clear if Barack Obama will have the will or the votes to take it on, it is clear what Mitt Romney would do: eliminate what little regulation still remains.
Finally, with all the fiscal distortions and sacrifices Romney plans to inflict on the less fortunate in the name of reducing the deficit, according to the Center for Budget and Policy Priorities, the Romney–Ryan budget will actually increase the deficit to 175 percent of GDP by 2050. Obama’s budget, on the other hand, will reduce the deficit by $3.8 trillion over the next ten years.
So let’s add it all up. Mitt Romney claims his strongest suit is the economy. But his experience is not relevant to our current situation. Careful analysis has shown that his policies will lose us 4.1 million jobs, while creating even greater inequality in the system, weakening the social safety net for our most vulnerable citizens, all while increasing the deficit. I’m looking for the upside here but I’m having trouble finding it.
To be fair though, I’m sure that Governor Romney means well. And after all, his economic plan will make life better for people like him, who, apparently are the only kind of people he knows anything, or cares anything about.
RP Siegel, PE, is an inventor, consultant and author. He co-wrote the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water in an exciting and entertaining format. Now available on Kindle.
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