Mitt Romney’s claim to economic competence has little to do with his policies, and everything to do with his persona — he is a successful businessman who has the aura of being able translate that know-how into turning around the country’s economy. For most of the last year, few mainstream observers have questioned that presumption, but with fewer than four months before the election, reporters are beginning to question him on his plans for the economy. And on Tuesday, in an interview with NBC’s Brian Williams, the former Massachusetts governor came up short when trying to explain his plans for near-term economic growth:
WILLIAMS: And let’s talk about the economy before we wrap things up. The major planks of your job plan, lower taxes, both corporate and marginal rates, and reduce regulation. Explain how that would be different from what George W. Bush tried to push through?
ROMNEY: Well, let me describe — actually, there are five things that I believe are necessary to get this economy going. One, take advantage of our energy resources, particularly natural gas, but also coal, oil, nuclear, renewables. That’s number one. A huge opportunity for us, and doing so is gonna bring manufacturing back, because low-cost, plentiful energy is key to manufacturing, in many industries.
Number two, trade. I want to dramatically increase trade and particularly with Latin America. Number three, take action to get America on track to have a balanced budget. Now those three things, by the way, are things which we have not been doing over the last few years, which I think are essential to getting this economy going again.
Number four, we’ve got to show better training and education opportunities for our current workers and for coming workers. And then finally what I call restoring economic freedom. That means keep our taxes as low as possible, have regulations modern and up to date, get health care costs down. These things will restore economic freedom.
At best, these are plans to improve long-term American competitiveness. As economists have already detailed, there’s nothing in these policies which would deal with the immediate economic problem — a significant lack of aggregate demand. Romney’s economic plan wouldn’t put money into ordinary people's pockets or increase consumer spending. If anything, when you consider yesterday’s vote on the Bush tax cuts, it would do the opposite.
The plan to fully extend the Bush tax cuts, advanced by Senate Republicans, would also end several tax benefits for working families, which include a tax credit for college tuition (of up to $2,500) and an expansion of the earned income tax credit. Overall, if passed into law, the GOP plan would allow tax breaks for 13 million working families with 26 million children to expire, costing them an average of $843 per family.
Given the degree to which Romney’s plans are indistinguishable from the ones pushed by congressional Republicans, there’s a fair chance that — if Romney wins in November — that Republicans are likely to raise taxes on middle- and working-class Americans. Indeed, when you couple this with plans to cut taxes on the wealthiest Americans and reduce spending on programs for the least well-off, you actually have a plan to contract the economy.
With regards to this interview, it’s also notable that Romney struggles to distinguish his policies from the ones pursued by George W. Bush. There’s a good reason for this — his advisors are nearly identical to the ones who staffed the Bush administration, and helped bring the economy to its knees in 2008. I wouldn’t be surprised if this fact made an appearance in the fall, as Obama moves from his more personal attack on Romney — which focuses on Bain Capital — to a broader attack on Romney’s plan to turn the clock back to the Bush years.