Mitt Romney’s chief economic adviser, Glenn Hubbard, writes in the Wall Street Journal: “The Obama administration’s attempted short-term fixes, even with unprecedented monetary easing by the Federal Reserve, produced average GDP growth of just 2.2% over the past three years, and the consensus outlook appears no better for the year ahead. Moreover, the Obama administration’s large and sustained increases in debt raise the specter of another financial crisis and large future tax increases, further chilling business investment and job creation.”He then lists four substantial Romney policy initiatives:
Stop runaway federal spending and debt. The governor’s plan would reduce federal spending as a share of GDP to 20%—its pre-crisis average—by 2016. This would dramatically reduce policy uncertainty over the need for future tax increases, thus increasing business and consumer confidence.
Reform the nation’s tax code to increase growth and job creation. The Romney plan would reduce individual marginal income tax rates across the board by 20%, while keeping current low tax rates on dividends and capital gains. The governor would also reduce the corporate income tax rate—the highest in the world—to 25%. In addition, he would broaden the tax base to ensure that tax reform is revenue-neutral.
Reform entitlement programs to ensure their viability. The Romney plan would gradually reduce growth in Social Security and Medicare benefits for more affluent seniors and give more choice in Medicare programs and benefits to improve value in health-care spending. It would also block grant the Medicaid program to states to enable experimentation that might better serve recipients.
Make growth and cost-benefit analysis important features of regulation. The governor’s plan would remove regulatory impediments to energy production and innovation that raise costs to consumers and limit new job creation. He would also work with Congress toward repealing and replacing the costly and burdensome Dodd–Frank legislation and the Patient Protection and Affordable Care Act. The Romney alternatives will emphasize better financial regulation and market-oriented, patient-centered health-care reform.
Rather than give a counter-explanation for the continued recession, the Obama team has restated (but louder!) that it inherited a bad economy. That doesn’t, however, explain why this recovery is so much worse than every previous one. Does President Obama really think failure to pass a minuscule son-of-stimulus in 2011 is the cause of our continued woes? Obama should explain why Romney’s analysis is wrong and why an alternative set of policies would not, in his view, have worked. I assume Obama doesn't really believe the policies that were enacted in the last 3 1/2 years “worked.”
More to the point, it is time for a serious policy debate. Romney has a set of ideas, including a tax reform plan that is not “tax cuts for the rich” but a flattening of the tax code that maintains progressivity. Unlike President George W. Bush, he wants to reform Medicare and has a plan for Social Security solvency with no private accounts. Simply shouting “Bush!” is not a sufficient response, not a serious one, to what Romney has offered.
At a more basic level, Obama really has offered very little defense of his own ideology. Does Obama think there is no trade-off between regulation and growth? Does he think raising taxes when we have 1.5 percent growth makes sense when raising them at 3 percent growth did not? In short, it is time for Obama stop hurling insults and account for his record.
The problem has not been a “lack of ideas” or lack of “details” by Romney. The problem is that Obama does not want to engage on the merits of policy ideas and set aside the strawmen. He should be intellectually honest enough to state accurately what his opponent’s policies are and why he disagrees. If he can’t or won’t he doesn’t deserve to remain president.