Romney: Big spending cuts would cause a Depression

[rambone]

Staying true to his Keynesian form, Mitt Romney said that spending cuts should be pushed down the road so that a depression isn't caused. In the interim, he advocates increases in spending for the Pentagon and the Military Industrial Complex.


Romney Argues Big Spending Cuts Would Cause 'Depression,' Contrary To Tea Party Activists

Romney, however, said that pushing drastic spending cuts during shaky economic times is a prescription for "recession or depression."

"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 percent. That is by definition throwing us into recession or depression. So I'm not going to do that, of course," Romney said in an answer picked up by former bank regulator William Black, a HuffPost blogger.

Any spending cuts, Romney said, should come down the road, after the economy has improved.

"I don't want to have us go into a recession in order to balance the budget," he said. "I'd like to have us have high rates of growth at the same time we bring down federal spending, on, if you will, a ramp that’s affordable, but that does not cause us to enter into a economic decline."

Romney's reasoning accepts the basic premise that government spending adds to GDP and leads to economic growth, at least during times when consumer spending and private-sector demand is down.

 

[strahd71]

i think there is "some" truth to this from the point of just cutting willy nilly would be just as bad. but geee theres plently of stuff we could cut or do that wouldnt hurt the economy.

1. foreign aid
2. all money that goes to the U.N.
3. all money that goes to NATO
4. reduce the department of education to about 20 people (there has to be some kind of minimum national standard)
5. get rid of the ATF
6. release the prisoners in for pot related offenses why pay for them?
7. flat tax a crossed the board..... everyone pays the same percentage including businesses. no more loop holes. its the only fair way too do it.
8. term limits, no one should be allowed to make politics a career. yes i know that people vote them in, and if they would stop. but this system obviously hasnt worked
9. we have enough oil here for something like a 100 years. i know we all want less government, but the economy will not get better while gas is so high ever
10. slash the EPA, no longer let them set policy, let them investigate and report findings
11. its harsh but we need to go to a national ID and start turning the illegals away from the hospitals etc. we just cant afford it anymore.

not a perfect or a complete list but what came to mind quickly of things that could be done without the risk of making things worse. i've heard all these things referred to as worthless just a drop in the bucket, many drops will fill the bucket.

i dont need to see radical change over night that will throw us into a crisis on the other side of the spectrum. i'd be happy just seeing a common sense plan to get us out of this mess eventually and real steps taking place to get us there.

i'm sure many of you think i'm stupid and we need to quit everything right now today. well yea but that will get us into a civil war much quicker than our present course and will be much harder to come back from i'm afraid

jake

 

[ATOMonkey]

i think there is "some" truth to this from the point of just cutting willy nilly would be just as bad. but geee theres plently of stuff we could cut or do that wouldnt hurt the economy.

1. foreign aid
2. all money that goes to the U.N.
3. all money that goes to NATO
4. reduce the department of education to about 20 people (there has to be some kind of minimum national standard)
5. get rid of the ATF
6. release the prisoners in for pot related offenses why pay for them?
7. flat tax a crossed the board..... everyone pays the same percentage including businesses. no more loop holes. its the only fair way too do it.
8. term limits, no one should be allowed to make politics a career. yes i know that people vote them in, and if they would stop. but this system obviously hasnt worked
9. we have enough oil here for something like a 100 years. i know we all want less government, but the economy will not get better while gas is so high ever
10. slash the EPA, no longer let them set policy, let them investigate and report findings
11. its harsh but we need to go to a national ID and start turning the illegals away from the hospitals etc. we just cant afford it anymore.

not a perfect or a complete list but what came to mind quickly of things that could be done without the risk of making things worse. i've heard all these things referred to as worthless just a drop in the bucket, many drops will fill the bucket.

i dont need to see radical change over night that will throw us into a crisis on the other side of the spectrum. i'd be happy just seeing a common sense plan to get us out of this mess eventually and real steps taking place to get us there.

i'm sure many of you think i'm stupid and we need to quit everything right now today. well yea but that will get us into a civil war much quicker than our present course and will be much harder to come back from i'm afraid

jake

That should take care of about .00001% of our problems. Keep digging.

The crisis is going to hit regardless. Either we bring it about, with a plan, or we just let it happen to us.

What do you think happens when $20T in debt goes from .5% APR to a more traditional 8% APR?

What happens when SS and Medicare double in the next 10 years?

While the EPA, FDA, Education, Energy, etc are all worthless, they really don't amount to a hill of beans when you look at the big picture, which is debt and entitlement.

 

[ThrottleJockey]

I guess if it comes down to a 5% GDP shrinkage --VS-- 400%+ inflation...

 

[ATOMonkey]

Inflation, pfffftttt... We'll never see that. They'll just revalue the currency long before hyper-inflation sets in.

Just take a page out of the FDR playbook. Confiscate all current forms of currency. Re-issue new Fiat currency at about 85% of market value. Bingo bango, you're back in the game!!

Just like hitting a reset button. Sure it'll screw people out of about $100T in unfunded liability, but thems the breaks.

 

[jeremy]

I am more than cool with the idea of hacking out Medicare, Medicade, Welfare, Unemployment, etc, etc...

 

[strahd71]

That should take care of about .00001% of our problems. Keep digging.

The crisis is going to hit regardless. Either we bring it about, with a plan, or we just let it happen to us.

What do you think happens when $20T in debt goes from .5% APR to a more traditional 8% APR?

What happens when SS and Medicare double in the next 10 years?

While the EPA, FDA, Education, Energy, etc are all worthless, they really don't amount to a hill of beans when you look at the big picture, which is debt and entitlement.

Like i said its juat a place to start. Not the only places. And there deaprtments i forgot. But we gave to statt some where.

My purpose was just to make a list/a place to start at. Not make a "definitive" list. So add yo the list take away from the list.

Personally im noy interested in the "thats so small it wont make a difference" attitude every drop in the bucket counts and ever proverbial bean in the hill counts

Jake

 

[ATOMonkey]

If you're trying to outrun an avalanche, baby steps at the start won't be terribly useful, is the point I'm trying to make.

Baby-steps were needed back in the '70s and ESPECIALLY in the 80s.

The math just doesn't work with the "we've got to start somewhere" approach. We're long past that point.

We're to the "HOLY **** WE'VE GOT TO DO SOMETHING DRASTIC!!!" point.

 

[ATOMonkey]

I just want to make sure that no one takes this personally.

The math is thus. We go into debt about $1T a year. We spend about $150B on all of the worthless agencies put together. You're still adding $850B to the debt each year, if you don't increase SS and Medicare and Medicaid, which you'll have to do without cutting benefits as the rolls continue to increase.

So, we HAVE to make drastic cuts to the budget to ONLY be $20T in debt.

How does that make you feel after a nice Memorial Day weekend?

It is literally impossible to avoid a financial catastrophy. Unless we continue to keep rates low and print money and no one else feels like calling us on it. I suppose we could just do that ad infinitum...

 

[jeremy]

I just want to make sure that no one takes this personally.

The math is thus. We go into debt about $1T a year. We spend about $150B on all of the worthless agencies put together. You're still adding $850B to the debt each year, if you don't increase SS and Medicare and Medicaid, which you'll have to do without cutting benefits as the rolls continue to increase.

So, we HAVE to make drastic cuts to the budget to ONLY be $20T in debt.

How does that make you feel after a nice Memorial Day weekend?

Cut it up, like a veggiematic...

 

[ThrottleJockey]

Let it all go back to the states. Those that manage poorly will be annexed and swallowed up by those that manage well.

 

[strahd71]

It do suck. I agree with ur whay saying. But how feasible is it to cut medicaid and SS and Medicare over night?

Jake

 

[ATOMonkey]

It do suck. I agree with ur whay saying. But how feasible is it to cut medicaid and SS and Medicare over night?

Jake

How feasible is it to let the currency collapse?

Here's a fun analogy.

You own a house. It sucks. The roof leaks, the pipes leak, the electricity doesn't work at all, it's leaning to one side, and you owe 200% of the value.

Now, you could try to fix one shingle at a time and let it fall on your head in your sleep.

You could also live in a tent for 6 months while you tear it down and build a new house.

Either way, the house is coming down. It's just a matter of where you want to be when it happens.

 

[strahd71]

I understand. Its ugly

 

[jedi]

It do suck. I agree with ur whay saying. But how feasible is it to cut medicaid and SS and Medicare over night?

Jake

The greek people are going to find out real fast, real soon. Italy and Portugal are next in line. So that will give us at least 3 "shows" to watch before it hits us.

I understand. Its Fugly

FTFY

 

[jbombelli]

Who here really thought Romney is a fiscal conservative and would rein in spending?

Lol.

 

[jedi]

Who here really thought Romney is a fiscal conservative and would rein in spending?

Lol.

rambone

 

[John Galt]

"You can evade reality, but you cannot evade the consequences of evading reality." - Ayn Rand

This fraudulent, corrupt GreatestPonziSchemeEver is going to collapse and it's not a matter of "if", but "when". We are on such thin ice right now and it's all smoke and mirrors (think of Weekend at Bernie's where the corpse was being propped up for appearances!)
I consider our "leaders" as more corrupt than those that are actually perpetrating the fraud as they allow/encourage this theft by their (intentional) lack of action. We had ratings agency that were (are) rating absolute corrupt junk as AAA and they're still in business (nobody is in jail). We had TBTF banks that required trillions and trillions of dollars to be bailed out, and not only are they BIGGER, they're getting bonuses for plundering those trillions AND NOBODY IS IN JAIL! The stock market is a casino - MF Global, Goldman Sachs, JP Morgan (silver manipulation), Citi, Bank of America, etc. and so crooked that one would wise to not participate, and our Fed is printing (counterfeiting) money while we buy our own debt.
Not to mention that 10,000 people will be retiring EACH DAY for the next 19 years and these are people that will not be contributing money (payroll taxes) into the system as they were when they were working, but will now be taking it out of the system in the form of retirement, SS, Medicare, disability, unemployment, etc.

Pay down your debt, invest in God, guns, groceries and gold and wait for the inevitable. It could be a few years, but someday the unsustainable will simply become unsustainable. And one last thing, don't lose your sense of humanity or humor - mankind has lived through worse!

 

[IndyDave1776]

"You can evade reality, but you cannot evade the consequences of evading reality." - Ayn Rand

This fraudulent, corrupt GreatestPonziSchemeEver is going to collapse and it's not a matter of "if", but "when". We are on such thin ice right now and it's all smoke and mirrors (think of Weekend at Bernie's where the corpse was being propped up for appearances!)
I consider our "leaders" as more corrupt than those that are actually perpetrating the fraud as they allow/encourage this theft by their (intentional) lack of action. We had ratings agency that were (are) rating absolute corrupt junk as AAA and they're still in business (nobody is in jail). We had TBTF banks that required trillions and trillions of dollars to be bailed out, and not only are they BIGGER, they're getting bonuses for plundering those trillions AND NOBODY IS IN JAIL! The stock market is a casino - MF Global, Goldman Sachs, JP Morgan (silver manipulation), Citi, Bank of America, etc. and so crooked that one would wise to not participate, and our Fed is printing (counterfeiting) money while we buy our own debt.
Not to mention that 10,000 people will be retiring EACH DAY for the next 19 years and these are people that will not be contributing money (payroll taxes) into the system as they were when they were working, but will now be taking it out of the system in the form of retirement, SS, Medicare, disability, unemployment, etc.

Pay down your debt, invest in God, guns, groceries and gold and wait for the inevitable. It could be a few years, but someday the unsustainable will simply become unsustainable. And one last thing, don't lose your sense of humanity or humor - mankind has lived through worse!

Agreed with one caveat--I am not inclined to think gold a good idea. On one hand it has never been worth zero, but I am concerned that its lack of direct usefulness will make it a poor form of wealth storage in an environment that likely could be precipitated by the perfect storm we have brewing since you cannot eat it, wear it, or use it for protection.

 

[IndyDave1776]

From what I can see, the following departments do not fill a Constitutional purpose and are not necessary: Education ($71.9B), HUD ($46.3B), Energy ($35B), Agriculture ($154.5B), CIA ($52.6B), Labor (101.7B), EPA ($8.9B plus billions and billions in damage to the economy, never mind freedom), add up to $526.3B. "Other Spending" (which was not broken down) comes in at $1,270.5B. HHS ($940.9) seems like another obvious target, considering that unlike Social Security, it has no element of anyone paying in with the expectation of a specific return for having done so. The military could be significantly reduced if we were to return to our roots and not maintain such a large standing military. I certainly do not want to take all the bars off the windows, but $672.9B is a little much. SS comes in at $882.7, but I have mixed feeling here. On one hand, people had their money taken as a mandatory 'investment' for a lifetime with the expectation of a return, but then again, they were asleep at the switch when Johnson & Co. raided the trust fund for the (not so) Great Society. The $98.5B in Transportation also warrant a close look. The majority of this money should never have been removed from the states, nor should it be used to extort them into compliance. there is a Constitutional authority for a certain amount of necessary road construction, but that does NOT mean federalizing land travel. It does look like we have plenty to work with if we can put the politicians back into their cages.