Romney Has Claims About the Economy, the Post Does Not Know If He Has a Theory

In discussing presumptive Republican presidential nominee Mitt Romney's statements on the economy, the Post told readers:

"Romney’s theory is that keeping tax rates low would spur investment in new businesses, thereby increasing economic growth and perhaps tax revenue itself. He believes that rolling back regulations would reduce the cost of doing business and make the United States more competitive."

It is not clear that Romney has a "theory" about the economy, nor does the Post know what he really believes. Romney has said that he wants to have lower tax rates on the wealthy and corporations. This will put more money in the pockets of the wealthy, the Post does not know if he actually believes this will help the economy.

The quote that follows this assertion indicate that Romney does not believe what he is saying, since is obviously not true.

“The president’s team indicated that if we passed their stimulus of $787 billion, borrowed, that they’d hold unemployment below 8 percent. We’ve gone 40 straight months with unemployment above 8 percent.

.... If you look at his record over the last 3¹ / ₂years, you will conclude, as I have, that it is the most anti-investment, anti-business, anti-jobs series of policies in modern American history.”

The comment about 8 percent unemployment refers to a memo printed in early January of 2009 that badly underestimated the severity of the downturn. The memo estimated that the stimulus requested by President Obama would create between 3-4 million jobs. In order to get the necessary Republican support in the Senate, President Obama agreed to a less effective stimulus, which the Congressional Budget Office has estimated created betwen 2-3 million jobs.

The main mistake in this memo was in its projections for the economy, not its assessment of the effectiveness of the stimulus. Presumably Mr. Romney knows this.

The second claim, that President Obama has pursued the most anti-investment, anti-business, anti-jobs policies in modern American history is absurd on its face. Profits are at their highest share of GDP is almost 50 years.

Since Romney must know that these assertions are not true, they cannot reflect what he actually believes. In such cases, rather than trying to penetrate Mr. Romney's thoughts for readers the Post would be better advised to just report what he says.

Revenue neutral and revenue increasing simultaneously
written by Robert Salzberg, June 14, 2012 5:39

From the article:

"Romney argued that raising taxes to spend more is counterproductive —"

Romney supports the Ryan plan which is touted as reforming the tax code in a revenue neutral way while generating more revenue to reduce the deficit over time.

The numbers Ryan uses to balance the budget aren't revenue neutral, they increase net taxes as a percentage of GDP by a lot. The Ryan plan predicts revenue as a percentage of GDP will increase from 15.8% in 2012 to 18% in 2014. A net 14% increase in revenue over just 2 years.

Raising revenue by raising taxes makes sense but raising revenue absent increased taxes means that somehow, someway a whole bunch of Americans will need to start making so much more money that they'll move up into higher tax brackets.

The evidence shows that the jobs created during the last few years are paying less than the jobs lost which isn't likely to change if the Ryan plan passes.

[Sic].
written by jhm, June 14, 2012 7:46

Even better was this morning's Morning Edition, wherein we learn that Mr. Romney hates Obamacare, trots out the patently false idea that it's bad for business, and relates how he'll be focused on replacing it as soon as he's ensconced in the white house. As an afterthought, the piece admits that the candidate does not actually have any ideas about what he might like to replace it with, but they leave out the fact that he hasn't been uninvolved in forming public health care policy, and the idea that he has no ideas is literally incredible.

Most Anti-Business in Modern American History
written by Paul, June 14, 2012 8:40

That honor would go to FDR:

"They are unanimous in their hate for me--and I welcome their hatred."

Pres. Obama doesn't even come close. Mitt is just the village idiot now.

Well, I'm certainly no apologist for Romney.
written by Bill H, June 14, 2012 9:18

But this constant explanation of the failure of the stimulus as being that Obama "badly underestimated the depth of the downturn," is wearing thin on me. It's like justifying a bank robber by saying that "he didn't know that it was real money."

If Obama did not "know the depth of the downturn" one has to ask why the hell did he not? Certainly many did, and many were screaming at the top of their lungs long before it passed that the stimulus was far too small, and that far too much of it was tax cuts rather than stimulative spending.

The downturn WAS badly underestimated
written by BH in MA, June 14, 2012 3:18

In January 2009, the estimate was that the economy shrank at a rate of 3.8%. By the end of February the revised estimate showed the economy shrank at a rate of 6.1%. The next release indicated a 6.3% contraction. The most recent revision, issued in July of 2011 estimates that GDP contracted at a rate of 8.9%. Based on estimates in hand in January 2009, an estimated max unemployment rate of 8% was not unreasonable. But reality was far worse, as became obvious over the next few months as the economy shed over a million jobs. The economy was much weaker, we would shed many more jobs, and the hole we would need to dig out of would be much deeper.

That chart that everyone waves around, showing us what Obama "promised" was based on the (very preliminary) official data available at the time that turned out to be drastically wrong.

Romney Has Claims About the Economy, the Post Does Not Know If He Has a Theory

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