But Romney, though he often buys into that sort of nonsense while criticizing Obama, knows better. Time magazine asked him about cutting spending in 2013. “If you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5 percent,” Romney said. “That is by definition throwing us into recession or depression. So I’m not going to do that, of course.” You couldn’t have gotten a clearer definition of Keynesian budgeting from Obama.Electing Mitt Romney in November is no different than giving Obama a 2nd term.The GOP talks spending cuts but has of yet to produce any.
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 clear that hurdle by simply assuming 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. “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.”
Compared to anything Obama is likely to get from a Republican House, that is, at least in the short term, a much more expansionary, Keynesian approach. But it’s also an awful precedent. In a sense, Republicans are holding a gun to the economy’s head and saying, “vote for us or the recovery gets it.”
That might well prove an effective political strategy: The more they say that they’re willing to let the debt ceiling expire and the economy run over the fiscal cliff, the more businesses will pull back and households will stop spending in order to make sure they have enough cash on hand to ride out another crisis. That will further depress the economy this year, making it more likely that Romney wins, and that Republicans embrace the smooth Keynesian glide path that they’re denying Obama.
Hat tip to Conservatives 4 Palin.