Thursday, June 02, 2011

Romney to drown government in bathtub?

As an earnest of  Mitt Romney's intellectual honesty, note the way he contrasts his future budgeting with Obama's in his campaign launch speech in Stratham, NH today:
Government under President Obama has grown to consume almost 40% of our economy. We are only inches away from ceasing to be a free market economy. I will cap federal spending at 20% or less of the GDP and finally, finally balance the budget.

Sounds like he'll cut spending in half, doesn't it? Except that he is, natch, comparing an apple and an orange.

Combined federal, state and local taxes have been pegged at 39.97% of  GDP in 2010 -- by what looks to me a  dubious source (albeit cited by wikipedia): a certain Christopher Chantrill at , a site devoted in large part to highlighting the wonders of the Ryan budget. The number includes a self-described guesstimate of state and local taxes.   Dubious or not, according to the same source, the figure stood at 36.94% in 2008 and at 34.73% in 1988, the last year of Reagan's term. Given that over 90% of economists accept the imperative to raise government spending during an economic downturn, the 2010 figure hardly represents a dramatic surge to within inches away from ceasing to be a free market economy. The last time total government spending was at Romney's implied target, 20% of GDP, was 1940, according to Chantrill. Guess Romney's going to drown government in the bathtub?

Not exactly.  Romney promises to cut federal spending to 20% of GDP -- echoing the Ryan plan, whose authors proudly contrast it to Obama's budget as follows: 
Brings government spending to below 20 percent of the economy, a sharp contrast to the President’s budget, in which spending never falls below 23 percent of GDP over the next decade.
And that's in contrast to Obama's 2012 budget, since superseded by the White House's long-term deficit reduction plan, which proposes some $2 trillion in spending reductions over ten years.  We're talking 20% vs. perhaps 21-22% here -- hardly a last-ditch rollback of the red tide. Never mind that balancing the budget within the course of a two-term presidency is essentially impossible.

That's not to say that the differences in proposed spending between the Obama and Ryan plans are not dramatic. But it's the Ryan plan that's truly radical, promising to end Medicare and Medicaid as we know them and reduce federal spending to 14% of GDP by 2050, a level not seen since the early 1950s. Does  Romney's short-term 20% target suggest a similar trajectory? If so, good luck wrapping the flag around a Ryanesque budget.

Greg Sargent puts his finger on the line of attack that Romney's budgetary sleight-of-hand serves:
Romney signaled early on that Obama’s cultural identity and understanding and appreciation of America would be central to the 2012 campaign, and here he’s suggesting that Obama has transformed our economy into something no longer recognizably American.

Creating the impression that Obama has raised spending to unAmerican levels is of course central to this disgusting scare narrative.

1 comment:

  1. Falling back on stuff like this will doom the Republicans in the end. I guess it's their best line of attack, but all Obama has to do is convince half of the voters that he lowered basically everyone's taxes. It'll be hard, but hopefully possible since it's true and all. Combine that with an ad quoting the various Republicans saying (1) half of folks don't pay taxes, (2) the rich pay all of the taxes, and (3) we need to "widen the tax base" ... harping on "widen the tax base" (quoted from Ryan's budget) could be the Democrats' response to "spread the wealth." Everyone in the GOP's lining up behind a plan to lower taxes for the rich by trillions, raise taxes for the poor and middle class to make up the difference, end Medicare, and gut Medicaid. That's all the campaign you need in 2012, and it's all the obvious interpretation of Ryan's proposal.

    Ryan will quibble, but then he'll be put on the spot as to what he actually means by cutting tax expenditures. You've got to cut most of them to make up for his huge proposed cuts without falling back on widening the tax base. That's the mortgage deduction, the health care exemption, and charitable deductions.