Is Romney the Keynesian choice in November?

posted at 5:43 pm on June 4, 2012 by Allahpundit

Lefty Ezra Klein wonders. The good news? The One’s dismal week is forcing liberals to come to grips with the increasingly real possibility of a Romney presidency. The bad news? The silver lining that Klein’s found for Democrats might not be as bogus as you’d wish. It hinges on two things. First, undeniably, the odds of Romney getting elected and having a Republican Congress to work with are much greater than Obama getting re-elected and having a Democratic Congress to work with. And that’s important since we are, after all, facing “Taxmageddon” when the Bush tax cuts lapse at the end of the year and the automatic spending cuts (including defense spending cuts) that were dictated by the last debt-ceiling deal go into effect. The economy’s going to get gut-punched unless Congress does something, and our best shot at getting them to do something is a big red wave in November that breaks the gridlock.

Second, if you’re a true blue Keynesian who believes in deficit spending (and tax cuts) during a recession to promote growth, then good news — Romney might agree with you. Paul Krugman’s been calling him a closet Keynesian since February:

Speaking in Michigan, Mr. Romney was asked about deficit reduction, and he absent-mindedly said something completely reasonable: “If you just cut, if all you’re thinking about doing is cutting spending, as you cut spending you’ll slow down the economy.” A-ha. So he believes that cutting government spending hurts growth, other things equal…

Almost surely, he is, in fact, a closet Keynesian.

How do we know this? Well, for one thing, Mr. Romney is not a stupid man. And while his grasp of world affairs does sometimes seem shaky, he has to be aware of the havoc austerity policies are wreaking in Greece, Ireland and elsewhere.

Romney said something similar to Mark Halperin during their interview a few weeks ago:

Halperin: You have a plan, as you said, over a number of years, to reduce spending dramatically. Why not in the first year, if you’re elected — why not in 2013, go all the way and propose the kind of budget with spending restraints, that you’d like to see after four years in office? Why not do it more quickly?

Romney: 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%. That is by definition throwing us into recession or depression. So I’m not going to do that, of course. What you do is you make adjustments on a basis that show, in the first year, actions that over time get you to a balanced budget. So I’m not saying I’m going to come up with ideas five or ten years from now that get us to a balanced budget. Instead I’m going to take action immediately by eliminating programs like Obamacare, which become more and more expensive down the road – by eliminating them, we get to a balanced budget. And I’d do it in a way that does not have a huge reduction in the first year, but instead has an increasing reduction as time goes on, and given the growth of the economy, you don’t have a reduction in the overall scale of the GDP. I don’t want to have us go into a recession in order to balance the budget. 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.

Lefty writers have been crowing about that since the moment the Time interview was published. Now Klein puts the pieces together:

There’s a good chance that a Romney administration would extend both Bush and Obama’s tax cuts and delay the scheduled spending cuts. Congress would raise the debt ceiling after Romney promised congressional Republicans that he’d sign some variant of Paul Ryan’s budget as soon as it’s sent to him. Somewhere along the way, Romney would pass both more short-term tax cuts and a long-term transportation bill — something Republicans have been blocking under Obama — that doubles as an infrastructure package and includes, to secure Republican support, the Keystone XL oil pipeline.

Nor is it clear that this will come at the cost of harsh deficit reduction in coming years. There will almost certainly be deep spending cuts if Romney is president, but both the Romney and Ryan proposals include trillions of dollars in unpaid-for tax cuts and defense spending. If Republicans decide to assume that deep tax cuts will lead, through supply-side magic, to larger revenues, their deficit-reduction plans might well end up increasing the deficit over the next few years, even if it does so in a regressive way. Remember, wrote Business Insider’s Joe Weisenthal, “Republicans were pro-deficit, and pro-entitlement expansion under Bush and Reagan. Deficit cutting only became part of the party’s ideology under Obama.”

Extending the tax cuts is a fait accompli if the GOP takes back the government in the fall but I’m honestly curious to see how Romney will sell his opposition to sudden deep spending cuts to a base that’s already suspicious of his commitment to small government. If Republicans end up controlling both chambers of Congress, what will the excuse for delaying action be? “Keynes was right”? Paul Ryan can give him some cover by virtue of the fact that his own Path to Prosperity is designed to shrink government gradually to minimize disruption to individuals’ economic planning. But even with Ryan in his corner, there’ll be some critical mass of tea-party Republican legislators — Rand Paul foremost among them, no doubt — that wants to use the GOP’s advantage to enact the same sort of sweeping change that the Democrats did with ObamaCare. How does Romney get out of that political jam when they start pounding the table? He’s not going to do something which he thinks will force a major economic contraction; does he try to build congressional majorities to delay deep cuts by replacing recalcitrant tea partiers with Democrats, knowing that the optics of that might only increase his headaches? If he thinks that conservatives will grant him a honeymoon period after he’s sworn in on issues as critical as the size of the federal budget and the speed with which meaningful cuts are made, I think he’s kidding himself. But maybe Klein’s right that this can be finessed by signing Paul Ryan’s budget — and getting to work on entitlement reform, assuming that Romney has the nerve to do so. Righties might forgive him the heresy of continuing spending in the short term if he achieves something significant to curb mandatory spending long-term. Think he can get a majority of Republicans in both chambers to go along with that? If so, you have more confidence in them than I do.


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Romney is right in a way because the government has become such a large factor in the economy.

joey24007 on June 4, 2012 at 5:47 PM

If we all vote for Gary Johnson instead we can turn back to the American way of freedom and prosperity and leave the corporate statists like Romney and Bloomberg by in our dust.

FloatingRock on June 4, 2012 at 5:47 PM

I see AP’s still looking for hits on a slow news day.

wargamer6 on June 4, 2012 at 5:48 PM

ABO

RedNewEnglander on June 4, 2012 at 5:49 PM

I see the left has found the rights Achilles heel today. Plant stories to make the right infight and watch Romney’s numbers tumble….this and the story about the guy the campaign may have tapped as the transition guy are all it took for the right to start tearing itself apart again….

why are you people so stupid?

tpw on June 4, 2012 at 5:49 PM

What most on the left *think* is Keynesian economics is not Keynesian economics. Keynes was for running surpluses in good times to pay off debt and in bad times you keep government spending constant and run a deficit to act as an economic flywheel. He did not advocate perpetual deficit spending or attempting to use government as an accelerator on the economy. He understood that government is a BRAKE on the economy and that during good times you apply the brake a little (increase taxes to pay off debt) and in bad times you let off the brake (reduce taxes and incur budget deficits).

The novel notion of Keynes was he showed that there was a legitimate reason for running a budget deficit. He understood that economic cycles are often longer than budget cycles.

John Maynard Keynes was also a fan of “The Road to Serfdom”.

crosspatch on June 4, 2012 at 5:50 PM

Romney is right in a way because the government has become such a large factor in the economy.

joey24007 on June 4, 2012 at 5:47 PM

No he’s not, people should keep their own money and spend it the way they see fit which will stimulate money the just, American way. When people like Obama and Romney get their hands on the money, they give it to their cronies. Keynesianism is a con game!

FloatingRock on June 4, 2012 at 5:50 PM

ABO

RedNewEnglander on June 4, 2012 at 5:49 PM

Anybody But Obamney

FloatingRock on June 4, 2012 at 5:51 PM

I see the left has found the rights Achilles heel today. Plant stories to make the right infight and watch Romney’s numbers tumble….this and the story about the guy the campaign may have tapped as the transition guy are all it took for the right to start tearing itself apart again….

why are you people so stupid?

tpw on June 4, 2012 at 5:49 PM

You’re right, it’s all a plot. Do not question Romney. Do not question Romney. Do not question Romney. Spending and federal micromanagement of health-care exchanges are good conservative principles.

Gonna be a long four years.

Allahpundit on June 4, 2012 at 5:51 PM

Allahpundit’s next headline: “Does Romney want to ban guns?”

Mark1971 on June 4, 2012 at 5:51 PM

If we all vote for Gary Johnson instead we can turn back to the American way of freedom and prosperity and leave the corporate statists like Romney and Bloomberg by in our dust.

FloatingRock on June 4, 2012 at 5:47 PM

+10000000000000000

joey24007 on June 4, 2012 at 5:51 PM

But maybe Klein’s right…

Get off it. Ezra Klein is a kid shooting spitballs. A fluffer for Krugman.

DanMan on June 4, 2012 at 5:51 PM

gimme a break. romney is merely stating the obvious. cutting a trillion plus dollars in one tear would in fact hurt the economy, at least initially.

therightwinger on June 4, 2012 at 5:52 PM

A vote for Gary Johnson is a vote for Obama.

hachiban on June 4, 2012 at 5:52 PM

crosspatch on June 4, 2012 at 5:50 PM

Oh, so one of our most staunch Romney supporters is a Keynesian. How nice.

http://www.garyjohnson2012.com/front

FloatingRock on June 4, 2012 at 5:52 PM

Paul Ryan can give him some cover by virtue of the fact that his own Path to Prosperity is designed to shrink government gradually to minimize disruption to individuals’ economic planning.

Maybe, but even Ryan is out there saying on numerous occasions that we have maybe 2 years to reign in spending before we reach the point of no return(i.e. Greece on steroids). Now does this mean Romney “gets it” and will call for massive spending cuts before they’re absolutely required(again, Greece on steroids)? I don’t know. But I don’t see Paul Ryan laying down and accepting the status quo just because Romney is a Republican President.

Doughboy on June 4, 2012 at 5:52 PM

No he’s not, people should keep their own money and spend it the way they see fit which will stimulate money the just, American way. When people like Obama and Romney get their hands on the money, they give it to their cronies. Keynesianism is a con game!

FloatingRock on June 4, 2012 at 5:50 PM

Guy, I’m saying that because the government plays such a large role in our mixed economy removing the government outright and quickly would result in a severe downturn.

Romney is right on this point.

joey24007 on June 4, 2012 at 5:53 PM

hachiban on June 4, 2012 at 5:52 PM

A vote for Obamney is a vote for Obamney.

FloatingRock on June 4, 2012 at 5:53 PM

Romney is right on this point.

joey24007 on June 4, 2012 at 5:53 PM

No, he’s not. We need to cut spending and balance the budget and make hard decisions to fix our country if we want things to get better. There is no magic pixie dust at the end of the unicorn rainbow.

FloatingRock on June 4, 2012 at 5:55 PM

Painfully makes sense. Can’t have all those newly unemployed bureaucrats with no real world experience out not paying “Their Fair Share” of taxes right off…have to ramp ‘em down. Wait, they are paid by taxes, ok, never mind.

kirkill on June 4, 2012 at 5:55 PM

Allahpundit’s next headline: “Does Romney want to ban guns?”

Mark1971 on June 4, 2012 at 5:51 PM

So the actual Romney quotes here about spending mean nothing? You think he’s going to rubber stamp a bill that would cut $1 trillion from the economy next year?

Allahpundit on June 4, 2012 at 5:55 PM

Allahpundit on June 4, 2012 at 5:51 PM

Don’t worry, they have called you a Palinista yet, have they?

CTSherman on June 4, 2012 at 5:55 PM

Paul Ryan can give him some cover by virtue of the fact that his own Path to Prosperity is designed to shrink government gradually to minimize disruption to individuals’ economic planning.

So “gradually” that it’s nearly imperceptible and won’t accomplish a thing.

FloatingRock on June 4, 2012 at 5:56 PM

I see AP’s still looking for hits on a slow news day.

wargamer6 on June 4, 2012 at 5:48 PM

Yep. Guess he didn’t want to talk about the rampant zombie cannabilism. Too bad, it’s much more interesting.

Deanna on June 4, 2012 at 5:56 PM

People need to realize this:

the government is never ever going to decrease in size, ever.

Unless Congress is removed. Not the people in Congress but the institution.

Elect Romney or a Reagan/Goldwater clone and the Congress will never take action to downsize government.

joey24007 on June 4, 2012 at 5:56 PM

“If you just cut, if all you’re thinking about doing is cutting spending, as you cut spending you’ll slow down the economy.”

Absurd. Krugman and Klein interpret this – “…all you’re thinking about” – as supporting Keynesian expansion?

He’s clearly saying that if you contract government spending too fast in a shaky economy that that will hurt the economy. Nothing about spending trillions in a war against Martians, Krugman.

We can’t eliminate the deficit in one year. It will have to be gradual and incremental.

SteveMG on June 4, 2012 at 5:57 PM

There’s no debate on this point: Romney is a Keynesian in his understanding of political economy. Listen for yourself:

“Now, I’m not going to cut a trillion dollars in the first year. And I heard a question. Why not? And the answer is: taking a trillion dollars out of a $15 trillion economy would cause our economy to shrink and would put a lot of people out of work.” -Mitt Romney
http://www.youtube.com/watch?v=C8g8YcCe_io

This is pure Keynesian thinking. Government spending is the driver of demand and economic growth; cutting government spending will destroy demand and hinder economic growth.

What Gov. Romney apparently doesn’t understand is that the government must take money out the economy in order to spend it. So, no, cutting government spending by $1 trillion is not ” taking a trillion dollars out of a $15 trillion economy”; rather it is leaving it in the hands of individuals and businesses, who, history shows, will in general make much more productive choices about the allocation of capital than a group of central planners sitting in Washington, D.C. Those planners simply don’t have the information necessary to productively allocate capital, even if they were entirely devoted to the public interest; the fact that lobbyists and special interest groups play such a large role in these decisions only makes their choices worse and the impact on our economy more harmful.

But, there you have it, ladies and gentlemen: the “conservative” choice for president thinks cutting government spending will take money out of the economy. Caveat emptor, indeed.

Inkblots on June 4, 2012 at 5:58 PM

Don’t worry, they have called you a Palinista yet, have they?

CTSherman on June 4, 2012 at 5:55 PM

Yeh that would make sense.

/

Whacked nistas are the most sensitive people in the world.

CW on June 4, 2012 at 5:58 PM

No, he’s not. We need to cut spending and balance the budget and make hard decisions to fix our country if we want things to get better. There is no magic pixie dust at the end of the unicorn rainbow.

FloatingRock on June 4, 2012 at 5:55 PM

sweet holy Moses!

If the GDP of a nation is lets say 35% government spending and you go ahead and remove that spending tomorrow then Romney’s point about the economy tanking immediately is correct.

joey24007 on June 4, 2012 at 5:58 PM

If we all vote for Gary Johnson instead we can turn back to the American way of freedom and prosperity and leave the corporate statists like Romney and Bloomberg by in our dust.

FloatingRock on June 4, 2012 at 5:47 PM

Yeah, good luck with that.

thebrokenrattle on June 4, 2012 at 5:59 PM

Under Obama v 2.0, or Mitt v 1.0 taxes will be raised. You can take this to the bank, unfortunately.

Schadenfreude on June 4, 2012 at 5:59 PM

Is Romney the Keynesian choice in November?

Oh gawd no!!!…NOT ANOTHER ONE…!!!!oh wait a minute I didn’t have my glasses on!……I thought you wrote KENYAN…!!!never mind!

KOOLAID2 on June 4, 2012 at 5:59 PM

supply siders which is supposedly most of the gop are supposed to be interested in growth first, cuts second.

therightwinger on June 4, 2012 at 6:00 PM

So, no, cutting government spending by $1 trillion is not ” taking a trillion dollars out of a $15 trillion economy”

Yes it is because what the government spends today is not even the result of tax revenue but the result of newly created money backed by nothing.

worthless money is another Keynesian principle.

joey24007 on June 4, 2012 at 6:01 PM

Think he can get a majority of Republicans in both chambers to go along with that? If so, you have more confidence in them than I do.

With you on the skepticism, plus no assurance in Mitt either

Schadenfreude on June 4, 2012 at 6:01 PM

I see the left has found the rights Achilles heel today. Plant stories to make the right infight and watch Romney’s numbers tumble….this and the story about the guy the campaign may have tapped as the transition guy are all it took for the right to start tearing itself apart again….

why are you people so stupid?

tpw on June 4, 2012 at 5:49 PM

What are we supposed to do as an alternative? Go around mumbling “All hail Mighty Mitt” in a daze of adoration?

ddrintn on June 4, 2012 at 6:01 PM

umm, so by all means, let’s keep the full on Marxist in office. Sheesh, there is no choice if you are sane. And no, Gary Johnson is not a choice.

kirkill on June 4, 2012 at 6:02 PM

So Romney is a conservative managerial progressive nothing new there. That is still far, tar better than the progressive managerial progressive currently in the White House. I’m not happy with Romney but I’ll pull the lever as an ABO. We’ll see what he does if he wins.

As to the Tea Party congress critters they have been mostly marginalized by the Republican house anyway. If things go right they’ll be a little larger but still won’t have the critical mass to do more than tinker around the edges. If the first couple of classes of Tea Party conservatives don’t get co-opted by DC then we have a chance to do some small government moves with a third class coming in in 2014.

Ryan’s budget is a start and if they can get it in place it is better than the obscene spending going on now. After all a journey of a 1000 miles starts with the first step.

That is the positive of the situation but I am concerned that we don’t have as long as many think to make the corrections needed not to go off the fiscal waterfall looming in the near distance.

chemman on June 4, 2012 at 6:02 PM

Lefty Ezra Klein wonders.

And this is interesting to normal people… why, exactly?

logis on June 4, 2012 at 6:02 PM

There’s a good chance that a Romney administration would extend both Bush and Obama’s tax cuts and delay the scheduled spending cuts. Congress would raise the debt ceiling after Romney promised congressional Republicans that he’d sign some variant of Paul Ryan’s budget as soon as it’s sent to him. Somewhere along the way, Romney would pass both more short-term tax cuts and a long-term transportation bill — something Republicans have been blocking under Obama — that doubles as an infrastructure package and includes, to secure Republican support, the Keystone XL oil pipeline.

This sounds plausible and likely.

Remember, wrote Business Insider’s Joe Weisenthal, “Republicans were pro-deficit, and pro-entitlement expansion under Bush and Reagan. Deficit cutting only became part of the party’s ideology under Obama.”

This is sketchy, as Republicans balanced the budget with Clinton. Were any cuts involved at that time?

RedRedRice on June 4, 2012 at 6:03 PM

Gonna be a long four years.

Allahpundit on June 4, 2012 at 5:51 PM

Gon’ be a looooong hot summer bef. the 4 years…

That’s right Mitt adherents, don’t focus on his shortcomings, focus on AP, the usually RINO eeyore…how blind are you really?

Schadenfreude on June 4, 2012 at 6:03 PM

You’re right, it’s all a plot. Do not question Romney. Do not question Romney. Do not question Romney. Spending and federal micromanagement of health-care exchanges are good conservative principles.

Gonna be a long four years.

Allahpundit on June 4, 2012 at 5:51 PM

Whoa.

+100000

portlandon on June 4, 2012 at 6:04 PM

That’s right Mitt adherents, don’t focus on his shortcomings, focus on AP, the usually RINO eeyore…how blind are you really?

Schadenfreude on June 4, 2012 at 6:03 PM

Or “whacked out ‘nistas” or “go back to HuffPo or DKos where you belong!!!!!” or “get a life pathetic looooooser!!!!!”

ddrintn on June 4, 2012 at 6:04 PM

If so, you have more confidence in them than I do.

Ap, you have no confidence in nuttin”! Except that ur shadow is SCARY!!!!

winston on June 4, 2012 at 6:05 PM

sweet holy Moses!

If the GDP of a nation is lets say 35% government spending and you go ahead and remove that spending tomorrow then Romney’s point about the economy tanking immediately is correct.

joey24007 on June 4, 2012 at 5:58 PM

Define “tanking”. Unproductive, subsidized industries would fail and misallocated investments in unproductive capital goods would be liquidated. Capital would then flow to productive investments once the government-directed malinvestment had cleared from the market.

Workers employed in previously subsidized industry would be laid off, and people who bought into the unproductive capital goods would suffer a negative return, as all malinvestments ultimately produce. But the economy would quickly return to organic growth without the deadweight loss of unproductive government spending driving out and replacing productive private investment.

Persisting in government spending and subsidy is what is actually “tanking” the economy – capital is being destroyed by misallocation. Your argument seems to be, for the good of the economy, we must continue destroying our wealth, which makes no sense if you think about it, but is the central fallacy of Keynesian thinking.

Inkblots on June 4, 2012 at 6:05 PM

So Romney is a conservative managerial progressive

chemman on June 4, 2012 at 6:02 PM

A what?

ddrintn on June 4, 2012 at 6:05 PM

“If you just cut, if all you’re thinking about doing is cutting spending, as you cut spending you’ll slow down the economy.”

Absurd. Krugman and Klein interpret this – “…all you’re thinking about” – as supporting Keynesian expansion?

He’s clearly saying that if you contract government spending too fast in a shaky economy that that will hurt the economy. Nothing about spending trillions in a war against Martians, Krugman.

We can’t eliminate the deficit in one year. It will have to be gradual and incremental.

SteveMG on June 4, 2012 at 5:57 PM

I agree, which makes this just more Klein and Krugman hackery.

RedRedRice on June 4, 2012 at 6:06 PM

If we all vote for Gary Johnson instead we can turn back to the American way of freedom and prosperity and leave the corporate statists like Romney and Bloomberg by in our dust.

FloatingRock on June 4, 2012 at 5:47 PM

Sounds like you’re already taking advantage of Cuomo’s weed clemency.

The Count on June 4, 2012 at 6:06 PM

FloatingRock on June 4, 2012 at 5:47 PM

How?

chemman on June 4, 2012 at 6:06 PM

You’re right, it’s all a plot. Do not question Romney. Do not question Romney. Do not question Romney. Spending and federal micromanagement of health-care exchanges are good conservative principles.

Gonna be a long four years.

Allahpundit on June 4, 2012 at 5:51 PM

I’m not saying you can’t question Romney. But to try to cause internal strife based on an article by Ezra Klein is pretty damn dumb….You’re better than this AP.

tpw on June 4, 2012 at 6:06 PM

people should keep their own money and spend it the way they see fit which will stimulate money the just, American way. When people like Obama and Romney get their hands on the money, they give it to their cronies. Keynesianism is a con game!

FloatingRock on June 4, 2012 at 5:50 PM

That’s classic Keynsian policy in a recession- let people keep their own money (via lower taxes) and decide how to spend it.

bayam on June 4, 2012 at 6:07 PM

So “gradually” that it’s nearly imperceptible and won’t accomplish a thing.

FloatingRock on June 4, 2012 at 5:56 PM

i think their bet is by unleashing energy, rolling back regs (dod-frank, obamacare, epa) and lowerin tax rates, they’ll get enough stimulus that the increase in revenues “hides the decline”. that is the deficit gets mangaeable relatively quickly by an increase in revenue while not really reducing spending that much. thats how they’ll play us. and gradually get rid of the reverse robin hood of medicare by means testing it (ryans plan).

t8stlikchkn on June 4, 2012 at 6:07 PM

You’re right, it’s all a plot. Do not question Romney. Do not question Romney. Do not question Romney. Spending and federal micromanagement of health-care exchanges are good conservative principles.

Gonna be a long four years.

Allahpundit on June 4, 2012 at 5:51 PM

Zing. AP’s feeling his oats.

ddrintn on June 4, 2012 at 6:07 PM

So Romney is a conservative managerial progressive

chemman on June 4, 2012 at 6:02 PM

FIFY.

Inkblots on June 4, 2012 at 6:07 PM

umm, so by all means, let’s keep the full on Marxist in office. Sheesh, there is no choice if you are sane. And no, Gary Johnson is not a choice.

kirkill on June 4, 2012 at 6:02 PM

Nonsense.

Gary Johnson is a candidate for President of the United States. People can vote for him if they want.

The federal government and candidates have been trending Marxist since the New Deal. Other than a few exceptions (Goldwater, Reagan, some Sens and Reps) there has not been a Republican who has actually tried to go anything other than keep the status quo or make government bigger.

Don’t put all the blame on Obama and at the same time tell people to vote for a party that is no better.

joey24007 on June 4, 2012 at 6:07 PM

I think he’s kidding himself. But maybe Klein’s right that this can be finessed by signing Paul Ryan’s budget

by the off chance there is a President Rmoney there is a 0% chance there will be 60 senate republicans, so the Ryan budget is going nowhere.

you’ll have to settle for deficit reductions by errr growing the military and cutting taxes. i’m sure that will work…..

DBear on June 4, 2012 at 6:09 PM

I’m not saying you can’t question Romney. But to try to cause internal strife based on an article by Ezra Klein is pretty damn dumb….You’re better than this AP.

tpw on June 4, 2012 at 6:06 PM

So how do you “question Romney”? “Ummmm now I’m not denying that Romney is a brainiac and rock-ribbed conservative and will win in a landslide and kick Obama’s ass and anyone who says otherwise is a commie bastard Palinista loser….but could this be just a teeny weeny bit of a slightly but only slightly bad thing?”

ddrintn on June 4, 2012 at 6:09 PM

Workers employed in previously subsidized industry would be laid off, and people who bought into the unproductive capital goods would suffer a negative return, as all malinvestments ultimately produce.

What country do you live in and which industries are you referring to, solar? Clean energy is subsidized at the level of tens of billions of dollars a year- an amount of money that’s completely irrelevant in the big picture. It’s less than the amount of money invested in Afghanistan project each year.

Although I agree that subsidies to the agriculture and oil industries are unnecessary.

bayam on June 4, 2012 at 6:09 PM

With you on the skepticism, plus no assurance in Mitt either

Schadenfreude on June 4, 2012 at 6:01 PM

I see your point..A lot of folks are going to be amazed and shocked that no ONE person is going to get us out of this mess we are in and becoming..:)

Dire Straits on June 4, 2012 at 6:10 PM

Guy, I’m saying that because the government plays such a large role in our mixed economy removing the government outright and quickly would result in a severe downturn.

Romney is right on this point.

joey24007 on June 4, 2012 at 5:53 PM

He is correct. But we’re going to have to take the bad medicine. There’s basically three ways this can go: first, we can take the bad medicine now and do a mega-spending cut. We’ll plunge into an ugly recession, but when we come out of it the groundwork will be there for economic resurgence to begin.

The second option we have is to tinker around the edges and hope the economy “comes back.” This is the plan the GOP is likely to follow (Europe is trying this one right now, how do you think it’s working out?).

The third option is to print money and hyperinflate our way out of debt, and if that happens, get ready for Zimbabwe.

Doomberg on June 4, 2012 at 6:11 PM

The sad part is that just halting the growth of government (getting rid of baseline budgeting) and approving a few oil projects would get the economy humming. Getting just that minimal movement in a conservative direction is like pulling teeth. What would be great is if they actually slashed the size of government, but it ain’t gonna happen.

Fenris on June 4, 2012 at 6:11 PM

CW on June 4, 2012 at 5:58 PM

There are a few whacked ‘nistas, plenty over at C4P that think she’s still going to be POTUS in 2012 as a matter of fact.

But there is a larger group that supported her that get accused of being “whacked ‘nistas” simply for criticizing Mitt for not being as severely conservative as he would like us to believe.

It’s not my fault that it’s hard to trust him. It’s his.

CTSherman on June 4, 2012 at 6:12 PM

Under Obama v 2.0, or Mitt v 1.0 taxes will be raised. You can take this to the bank, unfortunately.

Schadenfreude on June 4, 2012 at 5:59 PM

in the same way reagan rasied taxes in 86. reduce deductions, cap mort int at debt of 500K (rather than the 1.1MM it is now), drop the misc itemized deductions, or raise that threashold from 2% to 7.5%-10%, maybe raise the med deduction from 7.5% AGI, to 10 also. tinker with limiting deductions, but lowering rates. reagan did the same thing. remember personal interest (credit card int) went out (phased) in 86 as well as passive loss rules came into play which killed a lot of those for current deductibility. for low end incomes and simple taxpayers total liab would go down, the higher income, it aint gonna be a picnic even with lower rates.

t8stlikchkn on June 4, 2012 at 6:12 PM

Already measuring the drapes I see. Lol. Good luck.

Uppereastside on June 4, 2012 at 6:12 PM

That’s classic Keynsian policy in a recession- let people keep their own money (via lower taxes) and decide how to spend it.

bayam on June 4, 2012 at 6:07 PM

Keynesian policy is to lower taxes, or more often send out refund or stimulus checks, while maintaining or increasing public spending in an effort to increase aggregate demand (as the Keynesians in the Bush administration did in both 2002 and 2008).

The proper policy response is to cut government spending and balance the budget. If you can lower taxes while doing so, so much the better, but the tax cuts aren’t the key component of the policy response – rather, lowering government spending and borrowing is the key component.

Inkblots on June 4, 2012 at 6:13 PM

Although I agree that subsidies to the agriculture and oil industries are unnecessary.

bayam on June 4, 2012 at 6:09 PM

Oh deary me…

The Truth About Oil Subsidies
By Jeff Harding, on April 27th, 2012

Try this on your friends. Ask them if they think that Congress should eliminate subsidies to oil companies. I would guess that it would be almost unanimous that they should, at least from my experience.

But here is the trick: There are no oil subsidies.

If you define “subsidy” as “a sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive,” then there are no oil company subsidies.

But in the Obama Administration’s class warfare, a “subsidy” is a tax break previously allowed by the government. In this case those breaks relate to drilling and depletion allowances. Intangible drilling cost write-offs are for costs related to any services or equipment in the drilling of a well that have no salvage value. The government allows them to be 100% expensed in the year made. This is not unlike certain write-offs for investment in plant and equipment. Also, depletion allowances allow a write-off of 15% of the value of oil royalties produced every year. Think of it as being similar to depreciation of equipment or real estate.

tom daschle concerned on June 4, 2012 at 6:13 PM

What Allah didn’t highlight in bold:

What you do is you make adjustments on a basis that show, in the first year, actions that over time get you to a balanced budget. So I’m not saying I’m going to come up with ideas five or ten years from now that get us to a balanced budget. Instead I’m going to take action immediately by eliminating programs like Obamacare, which become more and more expensive down the road – by eliminating them, we get to a balanced budget. And I’d do it in a way that does not have a huge reduction in the first year, but instead has an increasing reduction as time goes on, and given the growth of the economy, you don’t have a reduction in the overall scale of the GDP. I don’t want to have us go into a recession in order to balance the budget. 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.

He’s right about this, and this is why I took issue with Palin’s call for “sudden and relentless reform”, urging relentless reform but with more gradual (not sudden) changes/cuts. The ultimate goal of a balanced budget is the same, it’s just a different way of attaining that goal.

Buy Danish on June 4, 2012 at 6:14 PM

by the off chance there is a President Rmoney there is a 0% chance there will be 60 senate republicans, so the Ryan budget is going nowhere.

DBear on June 4, 2012 at 6:09 PM

i beleive 51 is needed for budget reconcil. does that change the calculus?

t8stlikchkn on June 4, 2012 at 6:14 PM

Come on, just another coordinated lefty attempt to paint Romney as something conservatives can’t get behind. Ezra Klein deserves no respect; no quarter.

BKeyser on June 4, 2012 at 6:15 PM

Already measuring the drapes I see. Lol. Good luck.

Uppereastside on June 4, 2012 at 6:12 PM

nah – just fixing the obama damage. if anyone needs luck, its him. thanks tho.

t8stlikchkn on June 4, 2012 at 6:15 PM

Why am I not surprised that a lot of the Romney supporters turn out to be Keynesians.

‘A long four years’ by butt.

Go, Gary, go go go!

2012!

FloatingRock on June 4, 2012 at 6:16 PM

He’s right about this, and this is why I took issue with Palin’s call for “sudden and relentless reform”, urging relentless reform but with more gradual (not sudden) changes/cuts. The ultimate goal of a balanced budget is the same, it’s just a different way of attaining that goal.

Buy Danish on June 4, 2012 at 6:14 PM

That was my point at the end of the post. Ryan’s budget also lowers the budget gradually over time. Will that be good enough for conservatives once we have the government back or will they want something dramatic done now?

Allahpundit on June 4, 2012 at 6:17 PM

We need to have Ezra blog here at HA…that way we could complete the set…different perspectives and all that.

d1carter on June 4, 2012 at 6:17 PM

What country do you live in and which industries are you referring to, solar? Clean energy is subsidized at the level of tens of billions of dollars a year- an amount of money that’s completely irrelevant in the big picture. It’s less than the amount of money invested in Afghanistan project each year.

Although I agree that subsidies to the agriculture and oil industries are unnecessary.

bayam on June 4, 2012 at 6:09 PM

The energy sector, the healthcare sector, the agriculture sector, the defense industry, the construction and real estate sector, and large components of the transportation industry – notably passenger rail, but also airlines to some extent – are all heavily subsidized in this country. Banking and financial services, as well as automobile manufacturing, are also government-supported on a periodic, if not ongoing, basis. And I live in America.

Anyone who thinks we have a free market economy in this country hasn’t been paying attention.

Inkblots on June 4, 2012 at 6:19 PM

We need to have Ezra blog here at HA…

d1carter on June 4, 2012 at 6:17 PM

i beleive you have to be 21 to blog here.

t8stlikchkn on June 4, 2012 at 6:19 PM

ddrintn on June 4, 2012 at 6:05 PM

A European style conservative. Promises to manage and manipulate the administrative state better rather than change the administrative state. Anyone that has gone to Grad School (management, law or business) has been trained to manage and manipulate the administrative state.

chemman on June 4, 2012 at 6:20 PM

The proper policy response is to cut government spending and balance the budget. If you can lower taxes while doing so, so much the better, but the tax cuts aren’t the key component of the policy response – rather, lowering government spending and borrowing is the key component.

Inkblots on June 4, 2012 at 6:13 PM

Lower government spending has never played a role in economic recovery after a major recession in any part of the modern world over the past several decades. Where do you come up with that type of claim- i sounds like pure ideology.

I agree that spending is too high- but the timing is wrong to cut that spending, as Mitt has commented.

bayam on June 4, 2012 at 6:20 PM

Already measuring the drapes I see. Lol. Good luck.

Uppereastside on June 4, 2012 at 6:12 PM

We wouldn’t have to, but Michelle Is taking everything that isn’t nailed down so…..

portlandon on June 4, 2012 at 6:20 PM

Already measuring the drapes I see. Lol. Good luck.

Uppereastside on June 4, 2012 at 6:12 PM

these “real amurricans” have had a spring in their step since the bad jobs numbers came out. much like their congressional counterparts these “patriots” are rooting for failure and reveling in the suffering of their fellow countrymen all so they can seize power, where they will, no doubt, stifle democracy further and give even more power to their plutocrat overlords.

but hey, we’re the un-American traitors

DBear on June 4, 2012 at 6:21 PM

The energy sector, the healthcare sector, the agriculture sector, the defense industry, the construction and real estate sector, and large components of the transportation industry – notably passenger rail, but also airlines to some extent – are all heavily subsidized in this country.

Inkblots on June 4, 2012 at 6:19 PM

would you mind describing the “subsidies” to healthcare, construction and real estate? vis a vis vis healthcare are you including the distorting of govt 3rd party payors?

t8stlikchkn on June 4, 2012 at 6:21 PM

t8stlikchkn on June 4, 2012 at 6:19 PM

zing!

cmsinaz on June 4, 2012 at 6:22 PM

If Romney goes the keynesian route he’ll be a one termer, and his replacement will make obama look like Reagan.

There WILL be a civil war in my lifetime.

I will happily take part.

Wolfmoon on June 4, 2012 at 6:22 PM

t8stlikchkn on June 4, 2012 at 6:07 PM

No, we have serious systemic problems in this country that have been piling up for decades and are culminating now. Tinkering with the edges isn’t going help.

FloatingRock on June 4, 2012 at 6:22 PM

i beleive you have to be 21 to blog here.

t8stlikchkn on June 4, 2012 at 6:19 PM

+ 100..Hear!..Hear!!..:)

Dire Straits on June 4, 2012 at 6:22 PM

John Maynard Keynes was also a fan of “The Road to Serfdom”.

crosspatch on June 4, 2012 at 5:50 PM

May be, but I doubt it. In any case, Keynes was a central planner who thought you could save liberal democracy with fascist-style state control over investment.

No, thank you.

AshleyTKing on June 4, 2012 at 6:23 PM

So if you cut $1T in spending… we would still have a deficit…

How about getting rid of regulatory agencies which are a DRAG on the economy? Cut out the EPA, Labor, Education, Agriculture, Energy… you know, things not handed to the federal government to do? Plus nuke any parts of Obamacare/government loan take-over for education/ Fannie/ Freddie/ Ginnie/ Sallie that are trying to dictate loans and private spending via government input.

Cut out the government from the damned loop because it is sand in the gears for crony payoffs.

Cut $1T like that, and you get an economic recovery… plus an expansion of the energy sector.

And NOTHING is ‘too big to fail’ so enforce the bankruptcy laws without trying to ‘save’ failing businesses with failing business models. Most of that isn’t removing companies but allowing them to reorganize… without government cash involved.

Stop the spending.

ajacksonian on June 4, 2012 at 6:23 PM

If Romney goes the keynesian route he’ll be a one termer, and his replacement will make obama look like Reagan.

Wolfmoon on June 4, 2012 at 6:22 PM

Why wait through four more years of Keynesian hell, let’s but a stop to his scheme right now before it’s too late.

FloatingRock on June 4, 2012 at 6:24 PM

Way for the lefties to jump to conclusions. At the time, everyone was saying that cutting government spending cold turkey would be a huge hit to the economy. DUH! Doesn’t mean Romney is a closet Keynesian.

MrX on June 4, 2012 at 6:24 PM

That was my point at the end of the post. Ryan’s budget also lowers the budget gradually over time. Will that be good enough for conservatives once we have the government back or will they want something dramatic done now?

Allahpundit on June 4, 2012 at 6:17 PM

they will want it, but wont get it. if they’re (romney, ryan, the establishment) bet is right, and revenues increase, overall deficit decreases inline with historic levels, which would be i think 300-600bil range, i am afraid some of “us” will let it go. unfortunately. if there was ever a time to kill dept of ed, energy and the epa it would be now.

t8stlikchkn on June 4, 2012 at 6:25 PM

That was my point at the end of the post. Ryan’s budget also lowers the budget gradually over time. Will that be good enough for conservatives once we have the government back or will they want something dramatic done now?

Allahpundit on June 4, 2012 at 6:17 PM

The point is we can’t afford to wait. The Ryan plan doesn’t balance the budget until 2060 – and we will have been engulfed by a bond crisis far earlier than that.

So, we can’t go around pretending we have 50 years over which to gradually reduce spending and phase in reforms. We are faced with two, admittedly difficult, but nevertheless distinguishable outcomes: large but steady cuts in spending, which will result in sharp temporary pain as government-driven malinvestment is at last liquidated from the economy, to be followed by a return to sustainable economic growth and real prosperity; or unplanned, uncontrolled cuts or debt monetization during a debt crisis, in which discontinuities are introduced to social and defense programs without warning, and the economy is left in ruins, and we see Greek-style rioting in the streets.

Prudence will steer the former course, Keynesian ideologues will have us take the latter path.

Inkblots on June 4, 2012 at 6:26 PM

Cut regulations along with the taxes. Don’t forget the regulations. At least as important as cutting spending.

Attila (Pillage Idiot) on June 4, 2012 at 6:27 PM

So the actual Romney quotes here about spending mean nothing? You think he’s going to rubber stamp a bill that would cut $1 trillion from the economy next year?

Allahpundit on June 4, 2012 at 5:55 PM

But the headline isn’t “Is Romney a closet Keynesian?” It’s “Is Romney *the* Keynesian choice in November?”

And the answer is a resounding no. No matter what Keynesian tendencies he has, he’s nowhere near Obama on that scale.

Good Solid B-Plus on June 4, 2012 at 6:27 PM

No, we have serious systemic problems in this country that have been piling up for decades and are culminating now. Tinkering with the edges isn’t going help.

FloatingRock on June 4, 2012 at 6:22 PM

i agree with you. i am just afraid that with the current GOP candidate, they wont be possible. just trying to game out a likely scenario, not my preferred one. hoping for the best, preparing for the worst.

t8stlikchkn on June 4, 2012 at 6:27 PM

Uppereastside on June 4, 2012 at 6:12 PM

I’m growing a nice, healthy disgust for people like this. I take offense to them calling themselves Americans.

/spit

Wolfmoon on June 4, 2012 at 6:27 PM

but hey, we’re the un-American traitors
DBear on June 4, 2012 at 6:21 PM

Puhlease. Since BHO was sworn in, dissent is no longer patriotic. The truth is that a lot of us are hurting, and no amount of blame on the nearly powerless conservative movement is going to make Obama’s economy any better.

MeatHeadinCA on June 4, 2012 at 6:28 PM

That was my point at the end of the post. Ryan’s budget also lowers the budget gradually over time. Will that be good enough for conservatives once we have the government back or will they want something dramatic done now?
Allahpundit on June 4, 2012 at 6:17 PM

Okay, gotcha. Unfortunately if Hot Air’s commenting community is any indication many will probably be demanding more now, using the threat to primary him (while visions of a Palin presidency dance in their heads).

BTW, re Rand Paul, he has surprised me with his favorable comments about Romney (and Ryan) as well as his blasphemous support for Rubio’s version of the Dream Act, something I too support. After the ObamaCare fiasco I would urge the GOP to not try to emulate the Dems with sudden “sweeping” change and follow the Ryan lead.

Buy Danish on June 4, 2012 at 6:28 PM

t8stlikchkn on June 4, 2012 at 6:19 PM

LOL…

d1carter on June 4, 2012 at 6:28 PM

Paul Krugman’s been calling him a closet Keynesian since February:

Which is all you need to know to put paid to that smear.

MJBrutus on June 4, 2012 at 6:28 PM

these “real amurricans” have had a spring in their step since the bad jobs numbers came out. much like their congressional counterparts these “patriots” are rooting for failure and reveling in the suffering of their fellow countrymen all so they can seize power, where they will, no doubt, stifle democracy further and give even more power to their plutocrat overlords.

but hey, we’re the un-American traitors

DBear on June 4, 2012 at 6:21 PM

“Acknowledging Obama’s miserable policies haven’t helped the economy” = “rooting for failure.”

Lolz.

Good Solid B-Plus on June 4, 2012 at 6:29 PM

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