Capitolism

Independent in All Things, Neutral in Nothing

Mitt Pitches for the Economy

with one comment

Mitt Romney, one-time and possibly future Presidential candidate, wrote an  op-ed for USA Today yesterday. In it, he outlines his 10-point plan for revitalizing the economy.

Disturbingly, he begins by saying policymakers should ‘repair the stimulus.’ That statement suggests he believes the stimulus money was spent on the wrong things, not that the money should not have been spent in the first place. He also urges ‘dynamic regulations’ for the financial sector, while ignoring burdensome regulations for all sectors, like Sarbanes-Oxley.

His counsel turns in a positive direction when he writes about strengthening the dollar, reigniting trade, and nixing card check. He urges tax breaks for job-creation, which, while fine, should be broadened to mean lower taxes on businesses period. Lowering taxes allows businesses to make the decisions in their best interest – whether that be expansion by adding employees, shifting resources across internal functions, paying off debts, or entering new markets.

All-in-all, after reading Mr. Romney’s article, I have the same impression of him that I had during the last election: he understands some  of the basics of driving economic growth, but he still has much to learn.

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Written by Russell S.

December 4, 2009 at 4:51 pm

One Response

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  1. I like Romney but would say his analysis of the dollar’s weakness is insufficient.

    The dollar has fallen for eight years not because of increasing debt but because the previous and current administrations share the (Keynesian) belief that the trade deficit was/is of great significance and that dollar devaluation against other currencies was the best way to reduce it. The government can raise the dollar’s value any time it wants.

    During WW II, with debt at 120 percent of GDP, the dollar’s value was fixed and stable against gold.
    During the Reagan years, the dollar was strong despite rising deficits.

    Increased dollar demand spurred by pro-growth fiscal policy would certainly strengthen the dollar, but to truly restore the greenback requires a President, Treasury and Fed committed to a sound dollar policy.

    If such a policy were enacted — not via punitive rate increases but via a commodity price rule — I believe dollar demand would surge, markets would boom, commodity prices would fall, banks would start lending, trade would pick up, and the current crisis would be over.

    This is the classical model as adopted by Reagan, and which governed during the high-growth 19th century.

    Sean R

    December 4, 2009 at 6:43 pm


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