Epiphanyblog

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Next Presidential Debate: A Question for Candidate Romney

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Presidential Debate Govenor Romney and President ObamaObviously, my question will never be asked, let alone answered. But if I could ask Candidate Romney a single question, this one would be the question I asked.

Governor Romney, here is what you have said:

1) You want to reduce tax rates by 20% and maintain revenue neutrality by eliminating unspecified deductions, even though we’ve a large deficit to reduce that requires even more revenues. Your own adviser, economist Martin Feldstein, says that to accomplish revenue neutrality requires eliminating all deductions for everyone making over $100k. Essentially, he says, your plan will raise taxes on those making those making between $100K and $250K even while reducing taxes on the top 1% and even more on the top 0.01%.

2) You assert you want government revenues at their historic 20% of GDP as an approximate 19 million Boomers retire over the next decade. The best economic estimates state that government revenues need to increase to approximately 24% of GDP to pay for the Boomers’ retirement without decimating the federal government’s many other responsibilities that the American people have come to expect, from air and port safety to consumer and product safety to weather predictions to transportation and broadband improvements to NASA to court funding.

3) Moreover, you want to increase defense spending from 3% of GDP to 4% of GDP, or up to a trillion dollars per year. That means that, according to your ideal federal revenues, 16% of GDP will be allotted to all the many other functions the governments provides. Currently, government revenues are 17% of GDP with 3% for defense, leaving 14% for the rest of government. Your economic ideal increases the rest of the government’s share for everything else the government does by 2%, and that 2% will inevitably be taken up by Boomer retirements.

4) You said you want revenue neutrality from your tax cuts even as costs from Boomer retirement over the next decade increase, taking up even more of the federal budget, and you want to spend additional $200 billion per year on defense; yet, you want to reduce federal spending without hurting the nation’s economic competitiveness to reduce the deficit even as costs to the federal government incease.

Given that economic expansion over the last couple of decades never grew more than about 3%, and is much more likely to stay around 2% barring any future bubbles, how do you plan to decrease the deficit, manage the increased spending required by Boomer retirement, maintain vital functions the government does for the people and industries to increase national competitiveness, increase the defense budget, and reduce tax rates by 20%?

Sound confusing? Well, it is. That’s because Governor Romney’s economic plan is confusing. How can he meet the additional expenses of a retiring Boomer generation, increase defense spending by nearly $200 billion/yr, maintain vital government services needed for industry and US competitiveness now and in the future, provide product and consumer safety and the many other vital services and protections the government provides to the country, and reduce revenues via a 20% tax cut on top of making the Bush tax cuts permanent, and at the same time decrease the deficit and reduce borrowing?

Sure, he says the magical growth fairy, as Krugman calls it, will make it all work out. But the last couple of decades proves GOP and Romney assertions on growth to be overly optimistic. I prefer with start with the average predicted growth baseline of 2% and see where the numbers fall. As Clinton said, it’s arithmetic!

Frankly, I just don’t see Romney’s arithmetic adding up. But I’d love to see him to run the numbers for me.

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Written by Valerie Curl

October 10, 2012 at 9:45 AM

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