Romney's Budget-Balancing for Dummies
His plan would increase the debt and cut taxes for the wealthy
But Romney must think these "conservatives" very stupid if he's promising to balance the federal budget by eliminating nominal amounts spent on the nation's cultural programs. And he must think they're even dumber if they believe he can do that while delivering the massive tax cuts and defense increases he has also promised. As a former corporate investor and state governor, he certainly knows that his numbers just don't work.
Or at least not in the foreseeable future, as the Committee for a Responsible Federal Budget explained in a study of Romney's latest tax plan. Rather than bring the budget into balance, as Romney has repeatedly promised, his plan would substantially increase the national debt over the coming decade by reducing taxes on people like Romney himself—the wealthiest 1%.
"Estimated roughly, ignoring interactions and microdynamic effects, we find that without offsets Gov. Romney's plan on the whole would increase the debt by about $2.6 trillion," according to the nonpartisan committee. The roughness of that estimate was unavoidable because Romney's plan leaves out most of the vital details—such as which tax loopholes he would close and which vital programs and entitlements he would cut. It is full of tax cuts pleasing to gullible Republican audiences, but not much else.
Additional Billions for the Pentagon
So far, the hints that Romney has offered about proposed changes to the budget would increase rather than reduce deficits. Aside from his tax cuts—which represent an even bigger orgy of irresponsibility than the George W. Bush cuts—Romney often insists that he will substantially increase rather than reduce the defense budget, raising the total spent as a percentage of gross domestic product from 3.8% to 4%. That doesn't sound like much until someone does the math, which results in an additional $40 billion or so annually. Again, there are few substantive details so far, except his promise to build another 15 Navy warships annually, at a cost of roughly $21 billion alone.
Eventually all the unbridled spending that Romney wants to enact on tax breaks for his rich donors and yet more Pentagon waste will add up to real money—unlike the cuts he has loudly aimed at the country's cultural programs. Total annual spending on the National Endowment for the Arts, the National Endowment for the Humanities and the Corporation for Public Broadcasting—all hated by "conservatives" who behave like vandals intent on sacking the national heritage—amounts to about $700 million, with an "m."
In a national budget of nearly $4 trillion, with a "t," $700 million is a truly meaningless amount, representing some miniscule fraction of military cost overruns. And Romney—our new Spartan leader who avoided the draft in France—surely knows that, too.
So why does he talk about those cuts and avoid discussing the real tax increases and spending reductions that would be required to balance the budget? He seems to think that his tea party audiences can't do simple arithmetic. He may well be right.
© 2012 Creators.com
Of course a clear member of the top 1% like Romney must make an appeal to the Republican-voting half of the bottom 99%, trying to take Gingrich and Santorum's thunder. This small minority with the majority of the money also has the majority of the power, but they cannot control the congressional outcome without 50% of the bottom 99%. This 1% is the one who can put up 3rd party issue ads, pay for lobbyists, and have their Ivy League lawyers write loophole-filled legal language for their congress-folk to rubber stamp and pass in to congressional committee.
Mind you that there are plenty of Conservative Democrats that also respond to the anti-liberal appeal that draws in so many of the Republican portion of the lower 99%... by this I mean the white, suburban democrats who saw their job promotion (or retention) passed over in favor of some token affirmative action minority, or saw their children rejected from the college of their choice in favor of some affirmative action student from a poor ethnic neighborhood. Remember that some barely educated white trash from a trailer park is supposed to have a better break than some talented minority kid in this conservative person's world.
Fixing the economy? Nothing will fix it until we have some "fresh meat" sucker with money to spend or invest here. Every business under the sun, small, medium, or large, only deals when their consumers spend more money for their products and services than what it costs them on materials and/or pay to their workers. It's called a positive profit, nobody stays in when they see negative loss. Find a wealthier country to buy our exports. Hmmm, that is supposed to be "socialist Europe", but where are they now?
For the last 40 years, all of our economic growth was because of spending today's earnings and profits taken from some other consumer taking out a loan, often with a government guarantee. How many people do you know that looked like they lived well but were only paying the minimum payment on their credit? That was money paid in full to a smart, savvy business owner, but dependent on the consumer (or some future taxpayer) to come up with money long after the jobs were outsourced and taxes cut? -- This business model makes the mistaken assumption that consumers and workers are 2 different groups of people!