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MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

Romney’s fiscal message

Posted by WARREN MOSLER on June 19th, 2012

And all evidence shows President Obama agrees.

FISCAL RESPONSIBILITY

The mission to restore America begins with getting our fiscal house in order. President Obama has put our nation on an unsustainable course. Spending is out of control. Yearly deficits are massive. And unless we curb Washington’s appetite for spending, the national debt will grow to the size of our entire economy this year.

As President, Mitt Romney will cut federal spending and bring much-needed reforms to entitlement programs. Mitt will work toward balancing the budget, reducing the size and reach of the federal government, and returning power to states and the people.


Policy

Exercise fiscal responsibility to restore economic opportunity.
Washington is addicted to deficit spending. As President, Mitt Romney will cut spending to finally move our nation toward a balanced budget.

During the Bush years, the nation’s deficit—the gap between what Washington collects and spends each year—hovered between 2 percent and 4 percent of GDP. These levels were already problematic and a cause for concern. During the Obama administration, however, the deficit exploded to 10 percent of GDP.

One major problem with sky-high deficit spending is that it necessarily leads to another practice that undermines the nation’s fiscal foundation: borrowing unhealthy sums to pay for what we already cannot afford. America is on an unsustainable path that, within just a few short years, will cripple the economy and foreclose any opportunity for recovery.

Mitt Romney will bring fiscal restraint to Washington by placing a hard cap on federal spending to force our government to live within its means and put an end to deficit spending.

Mitt will also curb federal spending by repealing Obamacare, the federal takeover of health care that is scheduled to cost taxpayers one trillion dollars over the next ten years. He will also focus on eliminating wasteful government spending and right-sizing the federal government to save taxpayer dollars.

Mitt Romney’s goal is to put the federal government on a course toward a balanced budget and true fiscal responsibility.

Reform entitlement programs to keep them solvent and put America on a path to prosperity.
Federal spending on entitlement programs like Medicaid, Medicare, and Social Security has not only spiraled out of control, but has placed their very solvency in danger. Unfortunately, President Obama has failed in his fundamental responsibility to articulate a serious vision and plan for the future of these programs. At present, the total cost of U.S. entitlement programs accounts for more than half of all federal spending. Combined with interest payments on the national debt, so-called “mandatory” spending is over 60 percent of all federal spending.

Many of our fellow citizens have no idea that our growing entitlement spending has created a looming crisis. This is because politicians have a habit of hiding our country’s long-term liabilities. Mitt Romney believes that the federal government should publish a balance sheet each year—just as it requires public companies to do—so that Americans can understand the burden that future entitlement spending will place on our budget and economy. Over the course of his campaign, Mitt will propose the specific steps he will take as President to ensure the long-term solvency of Medicare and Social Security. While reforms are needed, Mitt also believes that these changes should not reduce benefits for current seniors or break the promises they have relied upon for their economic security in retirement.

Mitt knows that our economic future—along with the future of entitlement programs—depends on fundamental reform. If we wisely begin to reform entitlements and commit to live within our means, we can bestow on the next generation an America that is stronger and even more prosperous than the one we know today.

44 Responses to “Romney’s fiscal message”

  1. Harold Says:

    I just can’t fathom voting for someone this profoundly ignorant.

    Reply

    Vincent Reply:

    @Harold,

    So, you’ll be sitting this election out?

    Warren needs to educate Romney, a la Andy Card. Obama remains unconvinced, and it seems there’s little chance for a eureka moment, if it hasn’t happened by now.

    Reply

    Harold Reply:

    @Vincent, I just might. Definitely not voting for Romney though.

    Reply

    Vincent Reply:

    @HaroldI hear you, but, I still hope Warren, or someone, works on whoever ends up winning.

  2. Unforgiven Says:

    It’s our own fault. If the majority of voters knew how our currency works, you wouldn’t see any of this sort of nonsense.

    If it didn’t sell, it wouldn’t be there.

    Reply

    MRW Reply:

    @Unforgiven,

    Exactly.

    Reply

    seth2077 Reply:

    @Unforgiven, we get the government we deserve

    Reply

  3. Sidchem Says:

    Boy the way Glen Miller played, songs that made the hit parade, guys like us we had it made, those were the days, and you know where you were then, girls were girls and men were men, mister we could use a man like Herbert Hoover again, didn’t need no welfare states everybody pulled his weight, gee our old Lasalle ran great, those were the days!”

    Reply

    Unforgiven Reply:

    @Sidchem,

    And come election day, there are PLENTY of Meatheads to choose from! That’s what makes America great!!

    Reply

  4. mark Says:

    I will never forget the time, when I was a student in medical lab science at the University of Minnesota, I helped a VN vet get some treatment at the VA in Mpls.
    Row after row of prematurely aged, maimed, white and occasional black men, obviously nearly all poor and thoroughly used, waiited for hours.
    The good-looking,young,healthy and obviously very well-paid Indian physician beamed as he helped his patients through their hopeless lives. Says a lot about the USA, and the monsters who run it.

    Reply

  5. Walid M Says:

    i would not despair , Politicians never keep their promises.

    Reply

    ESM Reply:

    @Walid M,

    Agreed. I actually suspect Mitt Romney understands some of this stuff. But it is good politics to assail Obama for trillion-dollar deficits. After all, Obama assailed Bush for $300B deficits.

    Reply

    SMB Reply:

    @ESM, ESM, What suggests to you that Romney understands any MMT?

    Reply

    ESM Reply:

    @SMB,

    Well, first he has made an anti-tax hike pledge, and in fact he claims to want to lower rates for everybody.

    Second, his tax reform proposals, such as they are, since they’ve been made sort of off-the-cuff and not formally, seem to have less to do with raising revenue and more to do with getting rid of stupid deductions and exemptions which distort the market (e.g. getting rid of interest deduction for vacation homes).

    Third, I have not heard him blather on like many Republicans about how cutting tax rates pays for itself by making the economy so strong that it actually leads to greater tax revenue.

    Fourth, he’s formerly an investment professional, so there’s a good chance he’s had some contact with bond traders who generally understand that the federal government can always finance its “debt.”

    Fifth, he seems awfully awkward when making the pitch that the federal government has unsustainable budget deficits. I could be mistaking what is really his general awkwardness when speaking publicly, but he strikes me as more passionate and forthright when speaking about shrinking the federal government and turning more of the economy over to the states or the private sector. I think he wants to cut federal spending for the same reason I do, which is not to shrink the deficit per se.

    I take the fact that he is not doing a lot of bean-counting as a positive sign (e.g. tax cut here paid for with spending cut there, etc). Of course, this could just be his idea of good political strategy at this point, so I am far from confident that he does “get” it. Of course, we know that either Obama doesn’t “get” it or, more likely, he doesn’t care. So on the issue of MMT I think you gotta go with the new guy.

  6. Dan Lynch Says:

    The politicians are not necessarily ignorant, they are merely using the imaginary deficit problem as shock doctrine to force the end of the New Deal and the Great Society.

    Reply

    Gary Reply:

    @Dan Lynch,

    I agree. Europe is already on the way.

    Reply

    Harold Reply:

    @Dan Lynch, … which is worse than ignorant.

    Reply

  7. jonf Says:

    I agree that all evidence suggests Obama feels the same way. So now we have a choice: vote for the fool or the idiot. Take your pick.

    Reply

    Ed Rombach Reply:

    @jonf,

    A vote for Obamney is a vote for fascism.

    Reply

    MamMoTh Reply:

    @Ed Rombach,

    Thank god there is Romama as an alternative

    Reply

    Ed Rombach Reply:

    @MamMoTh,

    Yes, but a choice between the lesser of two evils is still choosing evil.

  8. dave Says:

    they will not stop till they have it all.

    Reply

  9. Jason Says:

    Agree with Walid. There is no way any U.S. politician will be able to make massive cuts to entitlements unless they are politically suicidal. They all talk the talk of austerity but they don’t even have a real plan never mind the cojones to try and implement it. GW just brought up partially privatizing Social Security and the uproar was so huge he never mentioned it again.

    Reply

    Gary Reply:

    @Jason,

    “There is no way any U.S. politician will be able to make massive cuts to entitlements unless they are politically suicidal”

    unless public begs for it. Especially seeing European woes.

    Reply

    Harold Reply:

    @Gary, That’s the plan. Keep harping on it until either the opposition does it and takes the blame, or the public demands it.

    Reply

    Dan Kervick Reply:

    @Jason, I believe the long-term plan is to continue to move as many people as possible to private plans, and shrink the proportion and political power of people who rely on the public plans. Then at some point Social Security reform will be no different Welfare reform.

    Reply

  10. Paul Palmer Says:

    Humans like the austerity message. Look at religion, nearly all preach it in some form or another, and look how many people adhere to them.

    Europe has become increasingly less religious, but now political asceticism has taken its place.

    Reply

    Vincent Reply:

    @Paul Palmer,
    Is it possible you all are being too hard on people. Most would agree an individual who keeps his/her finances in order deserves praise. No one at the top is teaching us why the situation might be different for a currency issuer.

    Reply

    Paul Palmer Reply:

    @Vincent,
    I am referring to people’s willingness to “sacrifice” when they think it is for the greater good, without questioning those who make the claim. Has nothing to do with running your finances soundly.

    Reply

    Vincent Reply:

    @Paul Palmer,I think people are attracted to austerity, in as much as they see people who’ve overspent, and have now lost everything. People should balance their budgets, so they extrapolate that to the government; they don’t understand why it would be different for the a currency issuer. There are some who do understand some to degree, but are worried about hyperinflation. There’s been no even slightly coherent message at the top, since Dick Cheney said deficit don’t matter.
    And, interesting to note, pre-vaccines and antibiotics,the austerity (eg kosher foods)preached by some religions was often life-saving.

    WARREN MOSLER Reply:

    maybe today’s representative govts are caught in the ‘trap’ of infinite regression- looking at yourself in the mirror looking at yourself in the mirror, etc- as the keep office by ruling by the polls?

    Reply

    Sergei Reply:

    @Paul Palmer,

    Paul Palmer: Humans like the austerity message. Look at religion, nearly all preach it in some form or another, and look how many people adhere to them.

    Religion is a bad argument. Pain is mostly a feature of Christianity which is based on suffering.

    Reply

    Ed Rombach Reply:

    @Paul Palmer,

    “Europe has become increasingly less religious”

    How is this possible? European markets always close for religious holidays. You mean they’re not all in church lighting candles?

    Reply

  11. Monica Smith Says:

    Republicans don’t want what they demand and reject what they want. That’s why Willard’s pretending he doesn’t really want the presidency. Then, if he doesn’t get it, he won’t be disappointed and if he does, he can graciously assume the burden and play the dictator to make up for the great sacrifice he’s making. It’s a win/win strategy.
    Where Democrats go wrong is in giving Republicans what they ask for and then being surprised that they’re not satisfied.
    Deception is very basic behavior because it works by keeping the “enemy” confused.
    Of course, other species don’t consider their own kind to be the enemy. We’re the exception.

    Reply

    roger erickson Reply:

    @Monica Smith,

    Do you know the GOP & Dems, or what?

    Warren, if there were ever two intellectually dishonest groups, it’s these two political parties.

    Reply

    Paul Palmer Reply:

    @roger erickson,
    A friend of mine who works in DC says, “We’ve always had a two party system in the US – the Evil Party and the Stupid Party. Every so often they switch sides.”

    Reply

  12. Jacob Goense Says:

    This is because politicians have a habit of hiding our country’s long-term liabilities. Mitt Romney believes that the federal government should publish a balance sheet each year—just as it requires public companies to do—so that Americans can understand the burden that future entitlement spending will place on our budget and economy.

    Well, if they ever want to engineer the “right size of government” getting your numbers straight is a start..

    Reply

  13. Dave Begotka Says:

    How can people actually think voting does anything but show support for a corrupted system and implicate them in mass murder, all the main stream media does is brainwash the drones that their vote counted because it was a close election.

    And the biggest JOKE of humaninty kicks the can down the road

    Reply

  14. y Says:

    Some clever people who understand that the government can always create enough money are still worried about the possibility of a severe future balance of payments crisis. Wynne Godley believed this was the biggest threat facing the US after a financial crash (which he predicted using his sectoral balances analysis back in 2000). This could potentially be the price future generations have to pay. Of course MMTers maintain that its not a real problem, but the debate is not settled.

    Reply

    Adam (ak) Reply:

    @y,

    I understand you’re referring to the US and the possibility of the loss of the status of the international reserve currency by the USD. True, this can be quite painful to eternal global domination ambitions. How will it impact the real economy though?

    In which currency the balance of payment crisis may occur? Yuan? Fine, the US will not be able to import all the stuff from China. Unless this happens when all the industrial capacity has been completely destroyed – I dare to ask “so what?”

    As long as the Saudis sell oil (they are 100% military dependent on the US) the American industry will bounce back in vengeance in 1-2 years time.

    What is the worst possible scenario is the continuation of the creeping austerity and de-industrialisation of the West. This is the only environment allowing the mercantilists from countries like Germany and China to execute their continental/global domination plan. MMT offers an alternative – bite the bullet now, ensure the full productive capacities utilisation in the US and forget about the dodgy intentions of the so-called “creditors” in China or elsewhere, trying to blackmail the American debtors into committing an economic suicide in the form of austerity. It is the Chinese Communist Party problem what they want to do with the stockpile of dollars.

    What will the future generations pay for? How long would the adjustment take when the Chinese savers lose their appetite for T-bonds and upset the global pricing structure? In the case of Argentina or Iceland the transformation was painful but took less than 2 years.

    Please (re-)read the following:
    http://bilbo.economicoutlook.net/blog/?p=10389

    Reply

    WARREN MOSLER Reply:

    Wynne later agreed with me

    Reply

    y Reply:

    Do you know if he wrote anything about the sustainability of growing/persistent current account deficits (contradicting his previous work)? In the work I have read he usually comes back to the view that they are ‘unsustainable’.

    Did he think that countries other than the US could sustain large CADs indefinitely? The UK, for example?

    Thanks.

    Reply

  15. Tyler Says:

    As bad as the economic policy has been these past two years, it might have been worse had the Dems maintained full control of Congress.
    President Obama would have gone all Bill Clinton and signed a long-term economy destruction (deficit reduction) package.
    He still might do that, but not as long as he is hardheaded about boneheaded tax increases, which will keep the GOP from signing on.

    Separation of powers blocks these parties from engaging in total destruction of our future.

    Reply

  16. vincent Says:

    Yet more austerity! Now the president is asking us to forgo gifts, and have money sent directly to the campaign instead. Does anyone know the multiplier effect of a campaign contribution vs a coffee maker?

    http://www.barackobama.com/obama-event-registry?source=TheObamaEventRegistry-20120622-signup-HQB&icn=20120622-TheObamaEventRegistry-signup-HQB

    Reply

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