When Romney Messes Up and Tells the Truth About Austerity

By William K. Black

Romney has periodic breakdowns when asked questions about the economy because he sometimes forgets the need to lie.  He forgets that he is supposed to treat austerity as the epitome of economic wisdom.  When he responds quickly to questions about austerity he slips into default mode and speaks the truth – adopting austerity during the recovery from a Great Recession would (as in Europe) throw the nation back into recession or depression.  The latest example is his May 23, 2012 interview with Mark Halperin in Time magazine.

Halperin: 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.”

Romney explains that austerity, during the recovery from a Great Recession, would cause catastrophic damage to our nation.  The problem, of course, is that the Republican congressional leadership is committed to imposing austerity on the nation and Speaker Boehner has just threatened that Republicans will block the renewal of the debt ceiling in order to extort Democrats to agree to austerity – severe cuts to social programs.  Romney knows this could “throw us into recession or depression” and says he would never follow such a policy.

Romney, however, has not opposed Boehner’s threat to use extortion to force austerity on the nation.  Romney has the nomination sown up, but I predict that he will stand by and let Boehner try to throw us into a Great Depression rather than upset the Tea Party-wing of the Republican Party.  Indeed, Romney will attack Democrats who have the political courage to defend our nation against his Party’s demands for austerity that would throw the nation into recession or depression.  What does one call a politician who, solely to advance his personal political ambition, supports his Party’s efforts to coerce austerity even though he knows that the austerity would cause a national economic catastrophe and states that he, “of course,” would never adopt such self-destructive austerity if he were president?  Romney is failing the tests of courage, integrity, and loyalty to our nation and people.

Later in the interview, Romney claims that federal budgetary deficits are “immoral.”  But he has just explained that using austerity for the purported purpose of ending a deficit would cause a recession or depression.  A recession or depression would make the deficit far larger.  That means that Romney should be denouncing austerity as “immoral” (as well as suicidal) because it will not simply increase the deficit (which he claims to find “immoral” because of its impact on children) but also dramatically increase unemployment, poverty, child poverty and hunger, and harm their education by causing more teachers to lose their jobs and more school programs to be cut.  Fewer children will be able to get college degrees.  Austerity is the great enemy of children – it is the epitome of a self-destructive, immoral economic policy.

Listen for the sounds of silence from Romney in coming months.  I predict that he will not act to protect our children or our economy from the suicidal and “immoral” austerity his Republican allies are trying to coerce the Democrats to inflict on our economy and our children.

 

27 Responses to When Romney Messes Up and Tells the Truth About Austerity

  1. Surely the republics will hand Romney, not Obama, the golden key to re-election.

  2. The truth will set America free, Mitt.

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  4. whoever gets elected and whatever fiscal policy is adopted, we can be assured it must be necessary or it would be different….just the way Adolf Hitler led the German people into death and ruin during WWII….think you can handle that?>…it is all explained in Theofatalism….google it for reference…lt

  5. We’re in bad trouble. Two major party nominees candidates who, in defiance of the facts, will pursue austerity; and two who also will pursue plutocracy, and increasingly fascism, while destroying democracy. I so wish Jill Stein had any kind of chance to win.

    • We can only badger and badger people until they realize that Dr. Jill Stein is America’s last hope (and we know I’m not being dramatic when I most unequivocally state this), and my weekly rant:

      If You Understand Just One Thing, Please Understand This

      Our economy is not consumer-based or consumer-driven, it was dismantled and what remains has been restructured to only serve their fantasy financial sector.

      There is no ideological struggle, nothing other than typical political theater as a smoke screen for the final wealth transfer.

      No political lackey actually believes their drivel and bilge about debt, deficits, and austerity.

      Comments about austerity programs serve no one other than the super-rich from which they further profit!

      Please understand this: we no longer live in a consumer-based economy; we exist in the quickly dissipating remains of a once consumer-driven economy, but which is in reality simple a fantasy finance sector which serves that upper percentage of the top 1 percent; the American portion of the Transnational Capitalist Class.

      This is why everything they say or claim or do makes no sense whatsoever to the rational citizen.

      Reasoning is not an option — austerity programs serve bond valuations, attacks on their debt and their deficit spending serve only to allow them to continue their process to further enrichment, further economic warfare.

      This is exactly why a complete fraudster and farce like Paul Krugman sounds so misleading as he’s always acting on behalf of the central bankers and speculator class.

      We live in a fantasy finance sector, where the overlords control trillions of worthless derivatives which they claim as their plutocratic weapons.

    • I agree with your take on Jill Stein. Do you know if she understands MMT? I see she wants the feds to create 16 million jobs. Sounds like a JG by another name. But she seems to think she has to finance her ideas.

  6. The real mystery is when will intellectuals recognize that Obama is not stupid? Obama knows that austerity is anti-growth, that it will make the depression worse. That it serves to funnel money to his power base, the base that got him elected. That’s the point.

    Just follow the money. One example out of many – Why would Peter Peterson’s Blackstone Group throw it’s support to Obama? The answer – only a democrat can break social contracts and gut the public domain.

    One good reason to vote for Romney: He is not a good liar. And better for all of us a bad liar than a good one.

  7. The UK is ahead of the American curve with the economy double dipping into recession as a consequence of the right-wing Coalition Government’s austerity programme of tax hikes and public sector job cuts. Worse is to come since most of the public sector job losses are yet to come and the demand deflationary economic death spiral the economy has entered into continues to accelerate. As Thomas Palley makes clear in his book “From Financial Crisis to Stagnation” the fundamental cause of the Great Stagnation is thirty odd years of using the wrong economic model, the Neo-Liberal Supply-Side Model when we should have been using the Demand-Side Model to create a virtuous economic circle of fair distribution of rewards.

  8. “I’m not familiar with precisely what I said, exactly, but I stand by what I said, whatever it was.”

    http://TheTwoMitts.blogspot.com

  9. Austerity is the impoverishment of the population while the few continue to prosper. Rampant wasteful spending by the government is not the cure. Can’t cure a debt problem with more debt!!!
    Continued deficits are suicidal for the economy and the country. We need government austerity. There is a massive mis-allocation of resources within government. We are living out the final days of the USSR. Our military spending is toxic to the economy. War impoverishes and does not stimulate any economy. It is not even a zero sum game. It impoverishes nations that are attacked and misallocates resources in our economy. The citizens are asked to fund the wars and then fund the rebuilding of the destroyed countries. The multinational corporations get no-bid contracts for fighting the wars and then also make obscene profits incorrectly rebuilding the country (designed into a modern dictatorship not a free market economy-so inherently inefficient)- all because of their crony capitalism relationships with the politicians. And then the politicians say the problem is the money wasted on the citizenry and the solution is austerity for the people!!! What a racket.
    We are a blend of fascism and communism. Both are destructive to the free market and both are forms of totalitarianism. We are truly in a neofuedalistic cage directed by a few with the consent of a minority who direct the machinery of the state to control the majority. No more wars of aggression. (save trillions) no need to rebuild (save trillions). The few are using the US military to enslave the world into a new totalitarian empire. Nothing good will come of this for the 99.9% of the worlds population.

    • Andreas: There’s a place for all of your & my & everyone’s ranting, fulmination and anger in MMT. But the point is to rant coherently. To put all your complaints together – for there’s almost always some truth in almost everyone’s complaints & rants – into one logical picture. But to not make logical leaps & to incorrectly conjoin complaints – that only sound right just because everybody else is saying & doing this. Coherent ranting = Science. Once you stop & slowly & carefully think about things, make sure you understand what you are saying, you realize that some of these things you rant about are incoherent, are the exact opposite of the truth – and that is what the Bad Guys wanted.

      Can’t cure a debt problem with more debt!!! Au contraire! More debt is the only way to solve a debt problem. I go to a restaurant & have some fine vittles. I owe the owner a debt. So now I choose. Can either (a) wash dishes til he says I’ve worked off my debt or (b) remember I’m living in a monetary economy & pay with the $10 bill I have in my pocket. I’m feeling like a Rockefeller, so I choose (b). I transfer this $10 debt from the government to me to the restaurant owner. I use it to settle my debt to the owner. Now he has a $10 debt owed him from the government, represented by this sawbuck. I cured my debt problem with debt. The restaurant owner happens to have a $10 debt owed to the government, for the infrastructure and the sound economy it provides. So he takes my $10 & puts it in an envelope & sends it to them. Another debt problem, solved by debt. Where’d I get the $10? From my gubmint job fixing the bridge that the owner drove over, so it wouldn’t kill him. The gubmint owed us, the citizens a well-working economy that advanced the general welfare. It solved this debt problem by making itself indebted to me to the extent of $10 by giving me the job, so I would fix the bridge.

      Continued deficits are suicidal for the economy and the country. We need government austerity. Not continuing deficits are suicidal. We need neither austerity ( unemployment) nor profligacy (inflation) . But for decades we’ve been erring on the side of austerity – especially since the GFC, though not as crazily as Europe. Sure, what the US government spends its money on is criminally insane. But the solution is not to wreck our & everyone else’s economy by government austerity. It is to stop the criminally insane spending & overtaxation.

  10. There will be a pushback when austerity is tried in USS as we are seeing in Greece, Spain, UK and France. Occupy Wall Street shows a significant segment of the population is not passive and the Tea Party sympathizers may discover their true interests.

  11. There will be a pushback when austerity is tried in US as we are seeing in Greece, Spain, UK and France. Occupy Wall Street shows a significant segment of the population is not passive and the Tea Party sympathizers may discover their true interests.

  12. If Romney is elected, austerity cannot happen if the Dems maintain control of the Senate.

    Obama loves austerity: http://articles.businessinsider.com/2012-03-02/politics/31115845_1_cuts-for-two-years-tax-cuts-middle-class-cuts

    • How can we guarantee that Obama loses and the Ds still control the Senate. That is, if there’s a D sweep they’re much more likely to retain the Senate. But if the Rs retain the House and Romney is successful that will indicate that right-wing appeals are working, and that may mean R control of all three branches

      But even if the Ds do retain control of the Senate, how do we know that the blue dogs and even austerity progressives among them won’t drag the rest of the Party into an austerity deal? Durbin’s been talking an austerity deal for some time now, and Petersen’s been giving a lot of money to the Ds. Also, Schumer is now the Senator from Wall Street

      Also, what about the other issues: 1) women’s rights, gay rights, 2) SC appointments that might begin to contain the movement toward corporatism, 3) an energy strategy that focuses primarily on oil vs. one that pushes multiple sources, 4) how about privatizing SS and Medicare. Obama won’t do that, even if he cuts entitlements.

      I’d take a chance on voting for Jill Stein if the polls showed she had more than 30% of the voters by election day; but I wouldn’t take a chance on voting Romney in the hope that the Ds keep the Senate.

      The best thing we can do is fight for MMT policies and try to break the whole austerity mindset. Then politics will change.

      • Agree except on Jill Stein. But if you live in a red state and no chance for Obama, vote Stein. Thats what I am thinking about anyway.

      • Voting for Stein would send the Dems a message and help Romney to win.

        In that same scenario, if the Dems were to win both houses of Congress, I doubt Reid and Pelosi would allow a President Romney to pursue austerity. Instead, they would be emboldened to stand up for deficit growth. It would be awesome.

  13. roger erickson

    Election by Kabuki. Why not just read entrails, or the bones, or tea leaves?

  14. I think Obama’s far more open to being led to the right position than Romney. One the economic policy front, Obama’s weakness is that he has no economics chops. He’s a constitutional lawyer, and he probably never even had to take econ 101 in college. He’s surrounded by advisers who, for various reasons, are more or less loyal to some version of the austerity dogma, though some of them are better than others. He listens to those advisers because he doesn’t know any better, and he picked those advisers, or had them picked for him, pretty much only because they were the economic policy advisers in the past. But at the end of the day, Obama’s a community organizer, compromise between the ideologies and interests of the parties that come to the table for the best benefit of all is his ideology. So far, he’s been trying to pursue the Clinton plan of economic growth, but without really understanding why the Clinton plan worked, what was wrong with it, and why it won’t work now, even if Republicans weren’t obsessed with defeating everything he wants to do, even when he adopts Republican policies. If he gets some serious pressure from dems that do have decent economics chops, like Elizabeth Warren, he can be moved, I reckon.

    Honestly, though, I get the feeling that the austerity plans Obama’s been offering to the Congress are less because he supports austerity, and more him offering an essentially Republican plan, and watching Republicans shoot it down because it came from Obama. At this point, Republicans aren’t just in favor of austerity, they’re only happy with austerity they get to force on an unwilling Democratic President. If that President makes noises to indicate that he’ll accept that austerity policy, Republicans drop it. It’s almost like the best way for the President to stop too much austerity is to look like he supports it.

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  16. Amazingly, the liberals have not learned the Ralph Nader lesson. When they split off from a major liberal candidate, they in effect vote for the conservatives. That is how Bush II. Now they urge a vote for Jill Stein. She may or may not be wonderful, but your protest vote merely will elect a Tea/Republican.

    You may hate Obama or not, but do liberals really want to vote, in effect, for Romney?

    Wise up.

  17. That Jill chick needs to team up with dizzy Lizzie warren. Also, mark roger her economic advisor. Barry or mitt sure got some swell people to choose. Voting for Pedro seemsthe best option. It seems people who believe in this non-sense site think they have only 2 choices. Deserves them right for not having the ability toThink. You deserve what is now and what your future will be.