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No Bailouts For Romney’s Intellectual Bankruptcy

Memo Pad

No Bailouts For Romney’s Intellectual Bankruptcy


By all accounts, Mitt Romney is a smart businessman with a sophisticated understanding of how economies work. So why is he so tied up in knots over basic questions of government spending in a recession and the limits of the free market?

Because he’s running for president in a party that has lost its economic common sense, its political bearings and probably Michigan’s electoral votes.

Here’s the Republican candidate off-script (the best way to find out what’s in his head) at a town hall meeting Tuesday in Shelby Township, Michigan: “If you just cut, if all you’re thinking about doing is cutting spending, why, as you cut spending you’ll slow down the economy, so you have to at the same time create pro-growth tax policies.”

This is a classic example of a “Kinsley gaffe” (named for my Bloomberg View colleague Michael Kinsley), which is when a politician accidentally says something that’s true but politically inconvenient.

Sure enough, Andy Roth, vice president for government affairs at the fiscally conservative Club for Growth, called Romney’s comments “hogwash.” Roth said the statement “confirms yet again that Romney is not a limited government conservative. The idea that balancing the budget would not help the economy is crazy. If we balanced the budget tomorrow on spending cuts alone, it would be fantastic for the economy.”

Jonathan Alter

Jonathan Alter is a bestselling author and journalist who served as senior editor for Newsweek from 1983 to 2011. He is currently a lead columnist for Bloomberg View as well as a contributing correspondent to NBC News. Alter's 2010 book, The Promise: President Obama, Year One, reached #3 on the New York Times Best Seller list.

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  1. Howz 1 February 25, 2012

    I call Romney a Rubric cube becase of the many sides he shows during elections. Against the liberal lion, Ted Kennedy he was publically a moderate to progressive govorner who just championed health care reform. Now faced with a party that has shifted dramatically to the right and wants a conservative purist test given to every canidate, Romney goes against his own common economic sense to please the masses. The problem with the masses is, as a Canadian study just showed that the Tea Party members are of lesser intelligence, can’t really comprehend the depth of the issues, and are easily manipulated, to repeat jargon(cut cut) and slogans (Obama care is bad). Romney, would probably have had more success runing against Obama in the Democratic primary where he could have been the moderate on social issues that he was(pro choice) and slightly to the right of center on Economic issues like Clinton was.

  2. bbarrett49 February 25, 2012

    who has lost their fiscal compass? republicans and bush spent 5 trillion more than they made in 8 years. democrats and obama have spent 5 trillion more than they took in in 3 years. they both should be take out to the woodshed. but who NOW will be responsible? obamas budget is a joke and we all know it, even dems admit it. will romney do what he says if prez? we know bo wants to spend till the cows come home. bob beckel says defeciets dont matter at all. can you run your house forever on credit? no. but, you dont have a printing press. true. but, when a yen is worth a dollar, gas will be a 100 per gallon. and all the gas and oil in the world will still be under our feet, not in our tank. time to judge for yourself. i once was a democrat and then later with reagan, i left and went republican. now it’s time has come to be an independent until someone gets a brain. only one that makes sense is paul…..cept his foreign policy would probably result in world war 3. other than that, no problem. lol

  3. concernedusa7 February 25, 2012

    The writer above, bbarrett49, has fooled himself. The Obama Administration inherited a disasterous financial program leading the USA & World into a Second Republican Caused Depression. In order to rescue the USA & World from a Second Depression it was absolutely essential that the USA Financial Conglomerate be saved from total collapse. The Obama Administration was forced to and Wisely chose to shore up the USA Financial Conglomerate with USA Government Funds. That inteligent action saved the USA & World from a devestating Second Republican Depression and brought the USA & World to the Great Republican Recession, which slowed the financial collapse and is leading to a slow but steady recovery from deaths door, Thank you Obama Administration!
    Every Hair Brained Idea the Republicans have put forth would throw the USA & World into a horrible Economic Collapse, Depression. I would also add that the Idealogue Republicans have tried to block every neccessary measure that has been put forth to insure the Economic Recovery of the USA & World.
    The Republicans beleive that destroying Collective Bargaining, Eliminating all programs that assist the poor and elderly, eliminatiny any and all abortions, as well as Cuttuing All Taxes on the Super Wealthiest of the Wealthy, doing away with Public Education, doing away with Health Coverage will bring the USA & World out of the Great Republican Recession, this Idealogy lacks any Inteligence!

  4. shoejoe1 February 25, 2012

    This is precisely why a voter reads media commentators so in-tuned to the various candidates running for office; especially for President. Jonathan Alter’s: No Bailouts For Romney’s Intellectual Bankruptcy, explains so much, especially when a voter has less than a degree in macro-economics. I already know who I am voting for.

  5. Independent1 February 25, 2012

    I’d just like to point out to bbarret49 that the deficit’s charged to Bush aren’t 5 trillion they’re 10 trillion. The worst president the U.S. has ever seen runs the country into the ground and by magic the deficts needed to fix the mess he creates are suppose to stop when he runs out office??? Sorry friend…George is responsible for every bit of the deficits that Obama is having to run up to fix HIS disaster. Just because on some fake books they end the counting when he walks out the door, I’m sorry but it doesn’t work that way. Besides, he negotiated a lot of the fixes that drove up the deficit by trillions that didn’t take effect until he skipped out.
    Not only are republicans these days completely derrift of common sense, they can’t even learn from their own mistakes. They’ve had a lot of practice in creating recessions by their idiot notion that you can stimulate the economy via tax and budget cuts…every attempt they’ve tried in doing this has failed. But again, no common sense, no learning even from your mistakes.

  6. freethinker February 25, 2012

    Cutting $1.3 trillion would result in unemployment. Unemployed consultants, bureaucrats, study groups, lobbyists, czars, etc. Now, of course, Democrats would cry that the jobs being cut would be police, firemen, etc. but those folks don’t really get paid by the federal government.
    Blaming Bush for the current increases in debt/deficit is like you charging more on your credit card to cover big charges your wife had already put on it. Get real.

  7. M.Moncur Gutschalk February 25, 2012

    Now I get it :taller trees in ever state; a republican in every pot, and a Caddilac or two in every garage.

  8. Bentley February 25, 2012

    Alter’s concise piece is absolutely accurate and well written. He understands well the position Romney is in because of his lack of principled discipline on the economic issues facing us today. Romney’s inablity to do more than regurgitate the platitudes of the whole GOP campaign against President Obama will prove to be devastating to the Republican Party’s future. We really do need a good, reasoned second party in this country. But, the GOP is offering only demagoguery and an extreme ideology driven plan, which the American voters will recognize as deficient and dangerous in today’s world.

  9. Cebes February 25, 2012

    Imagine a nation that has just gained sovereignty. In the past, its people may have been using a valuable commodity or a foreign currency for the purposes of exchange, but now the government decides to introduce its own fiat money. To ensure the community accepts it, the government can impose a tax, payable only in the new fiat money. This ensures a demand for the currency.

    Before people can pay the tax, however, they somehow have to get hold of the new fiat money. To make this possible, the government can buy some goods and services (which could include labor services) from the non-government, using the new money. Alternatively, it could lend some newly created fiat money to the non-government. This will put some money into circulation – create money – which can then be used in exchange as well as for tax payments.

    So government expenditure or lending must occur before taxes can be paid.

    This shows that, as a matter of first principles, government expenditure (or lending) are logically prior to taxation in a sovereign fiat-currency nation (SFCN), (or any state-money system).

    Taxes are not needed to fund government expenditure. Rather, government expenditure creates money that then cycles back in the form of tax payments. Government expenditure ‘finances’ tax payments.

    So, in a fiat money system, there is no need for taxes to be used as a means of funding government expenditure.All taxes and borrowing should do is manage aggregate demand, constrain inflationary pressures, not raise revenue.

    Why would a SFCN need to raise revenue. That requirement was true 41 years ago under Bretton Woods, but Nixon abandoned that system leaving us with the current system of flexible exchange rates and fiat currency. It is, therefore, nonsensical to speak of balanced budgets and insolvency. No nation can be insolvent in the currency for which it is the sole issuer. Check out Japan 200+ debt/GDP.

  10. hermanwyatt February 25, 2012


  11. hermanwyatt February 25, 2012


  12. dfrosenzweig February 25, 2012

    I’m not a registered Republican or registered Democrat,thankfully. I don’t like labeling myself as being a member of a collection of idiots and refuse to do so with political parties. Romney, who I thought was the most intelligent and competent Republican candidate until recently, is giving the Republican party a bad image, as well as himself. Quite frankly, the seemingly “straight” man, and all his recent media occurrences, is giving the REpublicans one less possible Presidential nominee and this is working to Obama’s advantage. AS much as I don’t like Obama, I’d rather have more from the same idiot than from another one. The same idiot is more predictable than a new one and I feel more secure knowing just that.

  13. fordneri February 26, 2012

    Democrats tax and spend promoting programs that maintain and increase the American dream creating more rights and opportunities for Americans first. Republicans borrow and spend cutting taxes, safety nets, government services, and declaring wars on nations that nobody can remember the reasons why. None of which has served American interests. All of which bankrupted the nation and created fertile ground for class warfare at home and international strife abroad. The GOP should dump Romney and run Walter Sobchak from the Big Lewbouski. If they can’t find the real Walter Sobchack they can have the Supreme Court create him. Walter personifies what the republican party really stands for in ways these pretenders will never understand.

  14. Kwabena February 27, 2012

    It is disheartening to me that Republicans still cling to ” tricle down economics”. I think anybody in his or her right mind would ever think that if the rich are made richer they would pass on the benefits down to the poor. That is completely false and hogwash and insult to peoples intelligence. It is about time that we the people wiseup and tell republcan conservatives to go to hell with their stupid “tricle down economics” the current republican presidential nominees are strongly advocating for, and which will benefit only their rich party associates and friends.

  15. rustacus21 February 28, 2012

    … just hit one OUT OF THE PARK!!! Romney is the 2nd (or 4th, counting Reagan & both Bush’s as 1) coming of another GREATLY – HIDDEN, that is – Conservative, Herbert Hoover!!! In case Conservatives are unaware, TAXES are an essential UTILITY, function & feature of a civil, MATURE & comprehensive Democracy. Otherwise, U have plutocracies. Dictatorships. Fascist state operation. All of which were flirted w/from 2001-2008 & nearly destroying the nation!!! The inability to grasp complexity is nothing new for Conservatives, but disasterous for the American people. The “free-market” is “economics”, NOT politics, which is why Conservatives are such failures at every bureaucratic & legislative level, from city to national levels. In each city, state & national setting, Conservatives has compounded – NOT relieved crisis! This is the unspoken, if not realized point of this article: Conservatives abdicate to “their” higher (the wealthy & corp’s) authority when elected (or appointed) to high public office. This is not what the Constitutions authors appointed WE, THE PEOPLE to advocate for! Re-read the Constitution & the parallel “Federalist Papers” documents for clarifications. Romney’s gaffs, stumbles, bumbles & generally clumsy tripping, on his way to the nomination must be a frightful site to Conservatives who have to support him out of racial/class-wanna-be-isms/ideological obsessiveness. Prez Obama is being “paid” to tone down his “will-to-serve” ambitions. Romney, etc., don’t know what else to do, other than turn the reigns over to their wealthy/corp masters. 4 those unclear about any of this, it’s the reason the nation is in the mess it is now. In fact, if U plan to vote Conservative, maybe the best thing is to sit this 1 out & let us Liberals/Progressives show U how to elect representatives responsive to the people wishes, as well as successfully correcting ALL that is wrong w/the nation/world. A quick review of the Clinton executive (NOT “person”) years gives an excellent primer on what a successful executive & Congress can accomplish. U can give U’r vote to Romney if U want, but that will be the last of an American Democracy U will see in U’r lifetimes…

  16. rustacus21 February 29, 2012

    …& some in between, even. Unbelievably, there are still Americans carrying water for Conservatives, w/out the slightest idea of the “fire” they’re (Conservatives) are pyromaniacs! Nearly burning the nation to the ground (2001-2009), dare-devil Republican/Conservative voters STILL haven’t seen enuff! Disaster junkies that they are, they will continue flirting w/disaster until they eventually do it! But what xactly will it take b4 Conservative voters get it, that the “people” (in spite of their cruelty, brutality & lust for depraved destruction of life & culture, they at least “look” human, anyway…) they vote for care nothing about the voters who get them into office (oh – but not the “rich” 1’s or corp. “persons” of course!)? But there’s still hope. Maybe 1 day, they (Conservative voters) will actually respond to reason & common sense… Maybe…


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