Would Mitt Romney be the best choice for president for economic recovery?
Side Score: 27
Side Score: 25
Yes. Mitt Romney understands what businesses need to succeed. He knows what is good for them and what obstacles they face.
He understands that the US Corporate tax rate is too high, so we can't compete with other developed countries. The effective tax rate on new investments in the US is 30%, while the average of OECD countries is 22.5%. People who are looking to invest in an economy or business on the international level are taking into consideration the extra 7.5% taxes in America(let alone the fact that some individual countries have a tax rate that is 17% lower than America's).
If we remove the obstacles to businesses, they will do the hiring. Unemployment will fall, and tax revenues will increase again.
Romney supports the War on Drugs, which creates poverty and increases the size of a class of people who are environmentally forced to be dependent on the government. Increasing the size of government, ere go how much it spends, ere go how much we pay/waste on a problem the government is creating itself.
As the Depression of 1921 shows, the best economic policies when the economy is in need of recovery are laissez faire policies. Mitt Romney definitely is not the president for this department, and as such should be overlooked in favor of someone along the lines of Ron Paul or Gary Johnson.
Gary Johnson would be the best choice for president if what you want is economic recovery.
He plans to cut spending across the board, hoping to reduce Federal spending by over a trillion dollars. This is practically the exact opposite of Obama and Romney, whom have both shown economic plans that would only increase spending.
His plan is to balance the budget immediately after taking office, and to veto any bills that admit spending dollars that go beyond what the government takes in.
He wishes to audit the fed and start up Federal approaches to reducing fiat currency and inflation. As well, he would demand that the Federal Reserve maintain a high level of transparency so that it can be scrutinized in any way it could possibly do something wrong before it does it.
He's for eliminating tariffs and allowing free trade over seas.
What he wishes to cut spending in not only includes Social Security, medicaid, and medicare, but government employee wages, the military, and allowing a more Free Market system where small business would be able to thrive without unnecessary and harmful government regulations.
I highly support most of his economic positions and feel that he is the best choice to get the States out of where it is now.
So the Congressional Budget Office tells you that Congress has to spend as much money as they want or there will be another recession, and you're just going to take their word for it? all of the recessions we've had recently were caused by government created scenarios.
While I generally agree that spending needs to be cut, and I support doing this by ending the wars in we are currently involved in in the Middle East, I have to disagree about a couple of his positions regarding what will and what will not help the economy.
First off, contrary to popular opinion, our deficit is not the main cause of our economic troubles, nor will balancing the budget be a cure all for fixing the economy. Certainly I agree that we should almost certainly reduce the current deficit, but doing so as quickly and drastically as Gary Johnson plans to do, while well intentioned, will almost certainly cause more harm than good. Allow me to explain:
Small business owners have not been suffering from burdensome taxes or government regulations. They've suffered because unemployment is high, which means that demand is down, and when demand is down people are less likely to spend money on shit (by definition). Now we could argue about what initially caused the economic recession that led to the decrease in demand, you'd say it had something to do with excessive government regulations, and I would say it had to do in part with the fact that the Glass-Steagal Act (that was intended to separate commercial and investment banks)became more and more impotent proceding its passage up until its eventual repeal in 1999; or to put it more simply, a lack of government regulation. This argument would likely get us nowhere and what's the point of arguing about who is to blame for sinking the Titanic when we're still on the boat. My point is, we need to look at what will improve the current low demand situation and the best chance of doing this is to decrease unemployment (people without jobs buy less shit).
So what will decrease unemployment? Ironically enough, it's increasing demand! If people are more willing to buy shit then people will be able to sell more shit so they will need to higher more workers to make and sell the shit (and also services: for the sake of this argument assume shit is an amalgamation of goods and services). So we need to decrease unemployment to increase demand, and increase demand to decrease unemployment. Well this sucks. What can we do?
According to Gary Johnson it's cut spending by cutting wages of government employees and benefits to citizens, stop inflation and to cut corporate taxes (which he claims are the real job killer on his website). Now giving people lower wages is not easy. If you don't believe me, imagine you've been working a job for a while and someone tells you that even though you will be doing the same amount of work as you always have, you will have to accept less pay for that work. People usually don't respond well. In economics this concept is known as "sticky wages" and can create a bunch of issues when markets try and correct themselves. Now there are two ways employers can get around this problem: a) change human nature b) rather than lower wages by x% just fire x% of your workers and have the remaining workers just pick up the slack. Which do you think most choose? This also means that since they are firing workers they are obviously not hiring new ones which is not a good thing for unemployment. Here's an interesting fact though: let's say you need to reduce the cost of labor by 3%, and so you have the choice of either firing 3% of your workforce or cutting salaries by 3%. For the reasons given above you will choose the former option because the latter will be unacceptable to your workers, and impractical because of their contracts.
Now up until this point we have sort of implicitly assumed no inflation, and if humans are completely rational then really inflation shouldn't play a part. Cutting someone's salary by 3% with 0% inflation should be the same as giving them a 2% raise when inflation is 5%. However, study after study has shown that people don't think rationally like this. It is much more acceptable for employers to offer wage increases at 3 percentage points less than inflation, rather than cutting their pay by 3% with no inflation. Therefore if there exists a relatively low, steady (a.k.a. predictable level of inflation) then the employer actually has a choice now and can in fact decrease there real wages because their nominal wages haven't gone down. Given GJ's position on inflation, we would be stuck with sticky wages meaning that employers would have to result to firing employees and not hiring new ones keeping unemployment at levels that depress economic development and keep demand too low for businesses (small or otherwise) from thriving.
Hopefully you now see why major cuts on government spending would exacerbate the current problem as opposed to solve it. Furthermore, pushing inflation down to zero would also lead to increased unemployment further harming our current recovery.
The real way to solve the current economic situation is to deal with the inequality in the country that has been increasing since 1979. There are a number of factors that have contributed to it (many of which are still unknown by economists), but cutting corporate taxes as well as benefits for the less well off is almost certainly not the right approach since that will lead to the opposite effect, further eroding the purchasing power of America's middle class which is the main driver of our economy.
I actually really want to like GJ a lot, partly because of his stance on social issues, but more so because he is willing to stand up for unpopular positions when popular candidates like Romney and Obama seem too afraid to act contrary to popular opinion. As much as I would like to agree with him, however, I can't fail to see the huge blemish that is his economic approach which would cause more harm to the American economy than any good it would do.
Hah. Oh man. There's a lot of stuff there I want to get to but I need to start at the last part that I read. The phenomenon you cite. Starting in 1979 the inequality in this country has been rising steadily, as you said. The reason for this is mostly the creation of the Federal Department of Education by Jimmy Carter. Just think about it. Since 1979 the average test scores of students in public schools have remained the same, or within a margin so small it might as well be. Before then the average was slowly rising. School is a business. No one would pay money for a school that didn't improve your child's test scores and intelligence... unless it's in their taxes. As a result of the failing stagnant education system that simply acts as a guaranteed jobs program to keep humans addicted to government, people who don't have the benefit of living in a good school district are screwed. People have been arrested for trying to send their kids to a better school. Why this staunch resistance to school choice? A system that has worked in every country it has been implemented? The government needs stupid, weak, easily manipulated people that need the government to justify its existence. Same drill with the Drug War. These things create poverty, and if they were eliminated the need for the kind of aid people talk about would be gone. Drastically reducing the cost of government. Gary Johnson is talking about ending the Drug War and the Federal Department of Education, in addition to advocating school choice. We spend more money on education than any other country and we're still failing, I think our methods need to be changed. I just want to point this out as an example of the kind of waste Johnson is talking about cutting.
The Federal government adds thousands of pages of regulations that businesses have to work around every year. State governments add thousands of pages of regulations that businesses have to work around every year. See what I'm saying? It's redundant, not to mention county regulations, and city regulations. There are states where if an Entrepreneur thinks he can provide a better service to customers that get that service from Unionized employees, then he is legally bound not to compete with the price at the customer's benefit. This practice started after slavery ended and Black people along with Immigrants from Mexico and Central America, etc. were entering the work force, asking to work for very little, less than the Unions which were White only at that time. If you want to live in a place where progress and cheaper, better goods & services take a back seat to this impossible safety net illusion Statists have, that's perfectly alright. That's why we have state's rights. At least with the Federal regulations loosened or gone entirely the giant corporations who bought all the politicians writing those regulations won't have such a massive upperhand on small business owners who get none of the tax credits or loopholes that stem from a faulty corruptible Income tax model, when the production and sale of everything you use your income on is already taxed. Oh hey Gary Johnson wants to scrap the current tax system. He's advocating with the fair tax right now, but it's really just a model to face the rigor of diplomacy between the branches of government. It's cool because used goods aren't taxed so there's a lot of initiative to recycle and for producers to make reliable goods. Not bad for the environment.
Some of the policy you're talking about it seems like you're not on the right web site. When Gary was the governor of New Mexico, he reduced the size of state government by over a thousand jobs without firing anyone. His was one of four states with a balanced budget when he left office, term-limited. We all know that if not for the two-term limit he, as the most popular governor of NM in the past several decades at least, would have been re-elected. He took state healthcare and reformed it, delivering better care at a 20% savings, and that's just money saved on the state application of healthcare which isn't the only tax money used on it in every state. This is ludicrous, why is he wrong to say that "There is a better way to take care of people, and its cheaper too."? This has proven true with every industry opened to the free market, why not with some of the stuff we traditionally assume as the government's job? Why can't we introduce elements of the free market into the way our government operates like with School Choice so that we can implement a level of accountability to the people paying for it and maybe see some results from this alleged do-gooder instinct.
You talk an awful lot about jobs but Johnson has done an awful lot about jobs. He has the best record out of any of the candidates on growth and unemployment. The Federal government still twists the facts they put out by things like not including people who have been unemployed over a certain length of time, etc. so it's impossible to tell where Obama really is in regards to his first term. But look at his record before he took office. What kind of success did Obama display in the Executive branch of government that made people think he would be a good president? Oh that's right- NOTHING. Romney's record is... unremarkable. Literally nothing to be mentioned worthy of praise. This alone makes Johnson the only sane choice for reasonable, logical voters. People keep throwing up this wall of Keynesian economics to tell us that we can't possibly spend less money than we are and get a better service for it, even though the price has been rising for years and it still hasn't gotten any better. Something is fundamentally wrong with that picture. Here's Gary Johnson, proven to run executive government to everyone's liking, to everyone's benefit, while lessening the tax burden on everyone, and you're trying to disprove his plan for the rest of the country with theory that has only led us into massive debt that someone someday I guarantee you will come to collect, from us, whether we like it or not. That's why I'm voting for Gary Johnson and why you should too.
nor will balancing the budget be a cure all for fixing the economy
It won't "fix" the economy, mainly because efforts to "fix" the economy often come short. It's about encouraging a very fiscal responsibility so that we don't expand our debt, especially in a time when spending vs. GDP is becoming critical and talks on "raising the debt ceiling" is becoming more acceptable. Balancing the budget doesn't work when you do it in one year (Clinton did it for two years, still didn't do much), but it keeps things from getting worse. When you spend money that you don't have and haven't had for a very long time, one of the first steps is to just stop doing that. Like gamblers. It's a problem when they think that they can find a way to get out of their debt. The Universe isn't magic. If something is putting you into a hole, stop doing that. THEN find your way out of that hole that exists so far.
They've suffered because unemployment is high, which means that demand is down, and when demand is down people are less likely to spend money on shit (by definition).
Everyone suffers when unemployment is high for various reasons. But what people try to do when unemployment is high is find jobs. When businesses can not afford to hire new people, they won't do it. Some people, when they don't have a job but maybe have a small amount of money to invest, will try to create a business. However, if it is too expensive to start a business, they will either get a loan or not start a business at all. The ones who get a loan are already in debt, and if they can't afford to hire people (for various reasons, regulations and taxes being the main ones), their business will go under and job opportunities will be lost. As well, they are in debt.
Starting a business is a major risk, and being so expensive from taxes and regulations is a major incentive to not make the risk.
The free market isn't magic. It is simply realizing that maybe the best thing to do is to either get the best and brightest people to run government (which we can only dream of) or to allow the free people to trade and invest with each other without such burdens. The efforts of government may be noble, but if we want small business to thrive and to hire new people, we need to make it less expensive.
So we need to decrease unemployment to increase demand, and increase demand to decrease unemployment. Well this sucks. What can we do?
Remove government restrictions and regulations that get in the way of hiring new people and making prices cheaper.
According to Gary Johnson it's cut spending by cutting wages of government employees and benefits to citizens, stop inflation and to cut corporate taxes
Cutting wages is more about cutting spending. Inflation is a bubble. i'd say that corporate taxes (or any business taxes) are what really hurt business and their ability to hire new people.
Now there are two ways employers can get around this problem: a) change human nature b) rather than lower wages by x% just fire x% of your workers and have the remaining workers just pick up the slack.
All depends on the job. If someone's job was truly so expendable, I'd say that the third option would be to not raise their wages for a long time and to hire new people for less money. People are paid based on how much the business thinks they need them. A small business, like a banana stand, may want to expand and also sell fish. they'd need to hire fishermen. With not so much money, they can't pay the fishermen that much money.
It's less about current businesses that are well set in what they do. They often make enough money to constantly hire new people. It's more about the smaller businesses or corporations that are constantly having to make very careful decisions on how they should invest their profits. If hiring people won't make them a lot of money, or may even cost them money, they won't do it.