Former Massachusetts Gov. Mitt Romney’s (R) economic plan has become the centerpiece of his presidential campaign. Though his proposals are often vague, analyses of the plan shows that it would provide huge tax breaks for the wealthiest Americans while raising taxes on low-income families. And though Romney claims to be concerned about the federal budget deficit, his plan would add more than $6 trillion in deficits over 10 years.
Romney, who touts his experience as a job creator, has suggested laying off thousands of public sector workers. He wants to slash vital programs for the poor and middle-classes, repeal the Affordable Care Act, and gut Medicare and Social Security. His embrace of the radical Cut, Cap, and Balance plan pushed by House Republicans would, in effect, shrink the federal government to pre-Ronald Reagan era sizes.
But for all his talk about the plan on the campaign trail, economists surveyed by Reuters say Romney’s plan likely wouldn’t deal with the main drags on the American economy, while the cuts to vital programs would be “utterly draconian“:
These steps would shrink the federal government’s role more than even former president Ronald Reagan managed 30 years ago when he turned many social programs over to the states. That scenario concerns liberal economists.
“If applied, these fiscal measures would be utterly draconian. The attacks on Medicare and Social Security would throw large portions of the population into poverty,” said Jamie Galbraith, business professor at the University of Texas in Austin.
Mainstream economists worry more that neither Romney nor his Republican opponents are addressing the main drag on the U.S. economy – weak demand from American consumers still weighed down by debt.
Among the “main drags” highlighted in the Reuters piece is the housing crisis, which has placed “a big drag on consumer spending which drives two thirds of the U.S. economy.” But the GOP candidates have offered little in the way of solutions for the crisis, and Romney’s own prescription involves letting the housing market hit rock bottom — further damaging millions of homeowners. “Markets work,” Romney told moderators at a debate in November when asked what he would do to address the housing crisis.
According to former Wall Street economist Thomas Gallagher, addressing demand should be at the top of the list when it comes to speeding the recovery. Instead, Romney is focused on budget deficits and tax reform — the types of austerity measures that are pushing Europe toward another recession. Perhaps that’s why a survey of economics professors found that the Republican proposals were so bad, they wouldn’t pass an Econ 101 class.