Romney and Ryan’s Disastrous Economic Plan – Forbes
Posted by WARREN MOSLER on August 13th, 2012
Romney and Ryan’s Disastrous Economic Plan
By John T. Harvey
The Center of the Universe
St Croix, United States Virgin Islands
MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.-
MMT: Taxes function to regulate aggregate demand, and not to raise revenue per se.
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The funds to pay taxes and buy government securities come from government spending.
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August 13th, 2012 at 9:05 am
I’ve been saying that there is actually very little difference between Obama and Romney’s economic policies, but the lesser of two evils is Obama. I say this, not for the attributes of the presidential candidate, but how this would impact the workings of Congress. A Republican president with a Republican Congress would give the Tea-Party Republicans that much more power and influence. Economic terrorists, specifically Paul Ryan would have a clear path to push their policies. At least with a Democrat president the need for each party to oppose each other guarantees occasional stalemates.
Now with Paul Ryan on the ticket… does this mean Mitt fully embraces Ryan’s plans and will be catering to his ilk? OR could these be a way of appeasing that crowd? Buying Ryan off with a position of prominence but with no power or influence. With Ryan on the sidelines, perhaps the path is cleared for Mitts comparatively more moderate policies.
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ESM Reply:
August 13th, 2012 at 10:39 am
@Broll The American,
History has shown that when the Republicans are in charge, taxes come down, but spending does not. Cutting taxes is easy; cutting spending is hard (and almost never done). MMTers should actually be rooting for a Republican takeover, all other things being equal.
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Adam (ak) Reply:
August 13th, 2012 at 4:49 pm
@ESM,
So the only hope is that the Republicans will do exactly the opposite to what they promised due to “downward rigidity of government expenditure level”. I grasp the idea very well as it sounds very Eastern European but I am not entirely convinced.
What if Mr Ryan is indeed a man of deep convictions and he actually does what he has promised (like Mr Cameron in the UK?).
Paradoxically the only hope for the American state under Romney/Ryan would be that while they want to strangle Social Security, they also want to spend like crazy on defence projects:
http://votesmart.org/candidate/key-votes/26344/
This may be enough to stop China from dominating the Asia/Pacific region. Or may be not…
In my opinion all is about technological supremacy.
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Ed Rombach Reply:
August 14th, 2012 at 4:25 pm
@Adam (ak),
What Ryan wants to do and what Congress lets him do are two entirely different things. Besides, it’s more up to Romney than Ryan and that assumes that Romney gets elected.
August 13th, 2012 at 9:11 am
How can it not be a disaster already…….
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August 13th, 2012 at 10:34 am
I read a headline yesterday….Romney distances himself from Ryan budget plan. Presumably one should look to Romney’s term as governor of MA to get an idea how he’d govern. Not sure the tea party would be happy. As for Ryan, seems like he means well–needs a private tutor on soft currency economics.
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Broll The American Reply:
August 13th, 2012 at 11:04 am
@Vincent,
I credit the moderate gubernatorial policies of Romney to fact that the general political climate of MA is rather liberal, rather than an insight into how he might preside as President. He was just pandering to the electorate and giving them what they wanted. He’s now running on a platform that is nearly the opposite of all his policies as governor. The greater national electorate really believes we need less government spending and less services, while we set-loose the “job creators” as we make the middle class pay more for Medicare and SS. He won’t introduce any policies that override these sentiments.
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Vincent Reply:
August 13th, 2012 at 12:55 pm
@Broll The American,
You certainly might be right–no way to know. One other thing we don’t know is Romney’s capacity to potentially adopt MMT principles. We already know Obama has no interest.
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Broll The American Reply:
August 13th, 2012 at 1:23 pm
@Vincent,
True enough about Obama. I see no reason to hope that Romney would go against the grain of the philosophy of the folks who elected him. It the belief is that small government and less benefits for the middle class is what is out there, then that is what he’ll do.
Vincent Reply:
August 13th, 2012 at 3:02 pm
@Vincent,
Understandable. But that’s exactly what Reagan and both Bushes did.
Dan Kervick Reply:
August 13th, 2012 at 4:13 pm
@Vincent, I read a headline yesterday….Romney distances himself from Ryan budget plan.
Yes, I think that’s the idea. Romney has been getting pounded lately, and he is trying to reposition himself as a moderate by casting his own running mate in the role of right wing ideologue, and then distancing himself from him.
Unorthodox tactic to say the least.
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Vincent Reply:
August 13th, 2012 at 5:32 pm
@Dan Kervick,
Agreed. But, even more unorthodox is electing a president with ZERO background.
Ends up we got what we paid for. He totally squandered his supermajority, and here we are–he owns these economic conditions.
The best part, as it turns out, is that he’s an incredibly pro business president, at least for the those that have survived. What a great thing cheap labor, and without alternative jobs in site, very loyal labor.
Economics, let alone MMT, is not on president obama’s radar, and I’m not sure why he isn’t regularly excoriated in these pages.
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August 13th, 2012 at 12:30 pm
Anyone that claims Ayn Rand as a policy influence is dangerous.
Whenever these republicans pull out Ayn Rand, I ask them a few simple questions about what her philosophy is and…you guess it…ignorance.
I am very confident most of these tea party participants never read Ayn Rand and if they did are not smart enough to evaluate her ideas within any real world context.
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Save America Reply:
August 14th, 2012 at 2:24 am
@Alex The True Liberal, Ayn Rand said she didn’t need children, her books were her children, so as warren often says about old people digging in dumpsters, who made her food for her when she got old so she didn’t have to dig in dumpsters? Did her books cook her dinner? I like how she told her lover that she made him and she could BREAK him too (so much for the self made man – lol!) How long do we expend resources to help old people live past thier useful ability to give back or do for themselves? After working with dying vets in nursing homes, I am for self assisted suicide as most of the doctors I was around were too. The death squads in nursing homes are real and can be a negative or positive force depending on perspective.
I believe Romney and Ryan are the anti-christ predicted in the bible, world war 3 is certain under them, it will be good for business and lift this country out of depression and give many jobs and the resulting disease, starvation, and chaos will kill off the weak and infirm, the remaining humans will be strong survivors, a new age for mankind will arise from the ashes, if all mentally damaged from living through the battles. If I were an elite in china, I would be talking with my elite friends in the middle east and in the west on how we all could kill off a few billion monkeys under us to reduce resource demand. Romney will be a good stooge. For the elites, war will be a really good thing. For the rest of you, romney will be the most awful thing that has ever happened. Romney was a bully as a kid, and I am sure he will be the greatest force ever for the war machine.
At least O understands you don’t build anything without a little help from your friends, was part of the shroom gang smoking pot, and as much as I believe he lies about his identity, roots, and used the worst tactics possible to defeat six of 9′s senator husband, and others releasing private divorce records, he is not consumed with the kind of logic and forces like romney is that will be certain to bring about ww3 (but O can’t stop what is coming either).
I think the real question to ask, is it OK to sack 2 billion humans so that the remaining few billion have a better standard of living? Or should we grow the monkeys to the point that everybody is just one crop failure away from dying? What kind of world do we want? I think warren mosler himself has done a good job illuminating what kind of world the elites are going to engineer.
Just using mosler posts from this blog here over the past few years, lets explore the world that is here now and what is coming, again these are all former mosler posts, we have a world where innocent children are locked up in jails by paid off judges and private prisons with no serious congressional investigation, a world where Obama and the state can murder people without any trial or jury, a world where the financial system is designed, by intent, to kill humans off to give tax and other incentives to financial behemoths. Mosler has raised all these points, and bernie sanders recent speech where he tells every other senator they are bought off corrupt cronies that have let down every citizen and human being on the planet just drills the point home even further.
As bernie sanders just said, it really isn’t going to matter who wins, the real power of this world has already declared war on the middle class worldwide, the elite have and will continue to roll back social reforms taking us back to 1920 levels of government support and erase decades of hard fought progress.
We are FREAKING DOOMED, it just a matter of time now.
Wether warren goes to congress or not is irrelevant. Most of you are FREAKING DOOMED. Game over dudes. Even Mosler himself, when seriously asked who can continue to carry the torch after he falls off his boat in a fishing accident, will not seriously engage the question or even give reasons why it is a question that should not be explored, he just goes mum. I guess mums the word, what a sad testament to the internet age where we should all be able to freely explore all ideas to better help everyone.
http://www.ideasinactiontv.com/tcs_daily/2005/08/we-need-250-states.html
We Need 250 States
By Arnold Kling – August 15, 2005 12:00 AM
“It is always costly to ensure that agents [government officials] act on behalf of the citizens and that they do not use their power to extract rents from their constituents…
The costs of monitoring agents increase not only with the geographic size of the collective but also with the number of people in the collective. This is because in a larger collective each member captures a smaller share of the rents created by collective enforcement and therefore has less incentive to monitor the agent…With the stake in the collective inversely related to group size, we can expect less monitoring and more rent seeking and rent extraction as group size increases.”
– Terry L. Anderson and Peter J. Hill, The not so Wild, Wild West, p. 30
Terry Anderson and Peter Hill make an argument that suggests that democracy does not scale well. As the size of the constituency group gets large, the politician becomes less accountable. Politicians find it easier to extract rents and abuse powers.
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August 13th, 2012 at 5:24 pm
The VP has never had any power or real influence with the sole exception of breaking a tied vote in the House. Biden is a clownish cheerleader, as was Gore. Cheney was a slight exception as he was already in Bush’s inner circle. Ryan will be given a lot of “studies” to do which will amount to nothing. Spending never gets cut.
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chewitup Reply:
August 13th, 2012 at 7:57 pm
@Jason,
VP breaks a tie in the Senate.
Romney has stated he’s not worried about the very poor. He is on board with non-discretionary safety net spending. And I think he is patronizing his base with the debt and deficit nonsense and the Ryan selection as running mate. ESM is right in that republicans have no problem spending once they’re in office. Military spending will get a boost due to Chinese belligerence in the South China Sea. As a former governor, he will likely be on board to lend fiscal assistance the the states. There are a fair ammount of left leaning partners at Bain who have Romney’s ear. He will be amenable to infrastructure spending suggestions. I do not see him agreeing with JG though. With Romney, you have a malleable guy, who would strongly desire to leave a legacy of accomplishment. Obama has Alinsky blinders on and too much Clinton surplus influence. I don’t think he can be turned around.
The next step after Romney is in is to get the House back to the Dems and put the balanced budget tea party mishegass to rest. Warren will be a rep from USVI and work his way on to Ways and Means. The pipe dream continues as Congress realizes that government spending is not constrained by tax revenue. In 3-4 short years, as long as the world has not fallen into a global conflict, Bob’s your uncle, recovery!
So bottom line, Ryan is just a ruse for the base. (Please don’t wake me up until November)
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Vincent Reply:
August 13th, 2012 at 8:55 pm
@chewitup
Great read! Sleep well.
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