To: tejek who wrote (114232 ) 5/26/2012 7:32:10 AM From: RetiredNow Read Replies (1) | Respond to Uh oh. Romney's a Keynesian too. I guess that puts a hole in your theory that the GOP would do anything different than what Obama is doing right now. As I've been saying for awhile, the real debate is not between the GOP and the Dems. They are all crazy, and as Bush Junior proved conclusively, both parties are Keynesians, though the GOP likes to talk like Austrians. You see, the real debate isn't between who's better, the GOP or the Dems, as you like to argue. Rather, the real debate is more between the rich and poor, the old and the young, and the Keynesians and the Austrians. Romney’s Big Fat Wet Kiss to Keynesian Economics nymag.com Jonathan Chait Not that there's anything wrong with that! Keynes' theories remain the essential guide to understanding recessions. Mitt Romney’s interview with Mark Halperin, as Charles Pierce points out, is that Romney openly repudiated the central argument his party has been making against President Obama for the last three years: that he spent too much money and therefore deepened the economic crisis. Indeed Romney himself had been making this very case as recently as a week ago (“he bailed out the public sector, gave billions of dollars to the companies of his friends, and added almost as much debt as all the prior presidents combined. The consequence is that we are enduring the most tepid recovery in modern history.”) But in his Halperin interview, Romney frankly admits that reducing the budget deficit in the midst of an economic crisis would be a horrible idea:Halperin: You have a plan, as you said, over a number of years, to reduce spending dramatically. Why not in the first year, if you’re elected — why not in 2013, go all the way and propose the kind of budget with spending restraints, that you’d like to see after four years in office? Why not do it more quickly?Romney: Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5%. That is by definition throwing us into recession or depression. So I’m not going to do that, of course.Of course ! Romney says this as if it’s completely obvious that reducing the deficit in the short term would throw the economy back into recession, even though he and his party have been arguing the opposite case with hysterical fervor. Republicans have committed themselves to Austrian economic notions and other hoary doctrines justifying the position that reducing deficits is a helpful way out of a liquidity trap.Brian Beutler and Matt Yglesias both reach this conclusion today, though I think their reasoning is wrong. They conclude, from the fact that Obama has a more credible plan than Romney to resolve the medium-term deficit, that Obama would do less stimulus than Romney because he wants to do less stimulus than Romney. Both of them ignore the fact that Obama has a pretty ambitious stimulus plan . Now the plan won’t pass because Republicans would never vote for it, and everybody including Obama knows this, so we’ve all treated it as a message device because that’s the only function it serves. But I’m confident Obama really would like to sign his stimulus plan if he could.like they were under President Bush . What’s more, Democrats wouldn’t stop it, because Democrats don’t have any history of opportunistically abandoning Keynesian economics when the other party’s neck is on the economic line. So, yes, a President Romney would be more likely to sign strong stimulative legislation than Obama — not because he believes in it more strongly, but because, as David Frum says, we’re all Keynesians during Republican administrations.
