Mitt Romney's question-mark economy

October 24, 2012|By Robert B. Reich

We're closing in on Election Day, but the questions about what Mitt Romney and Paul Ryan would do if elected are only growing larger. Rarely before in American history has a presidential ticket campaigned on such a blank slate.

Yet, paradoxically, not a day goes by that we don't hear Mr. Romney, Mr. Ryan or some other exponent of the GOP claim that businesses aren't creating more jobs because they're uncertain about the future. And the source of that uncertainty, they say, is President Barack Obama -- especially his Affordable Care Act (Obamacare), the Dodd-Frank Act, and uncertainties surrounding Mr. Obama's plan to raise taxes on the wealthy.

Mr. Romney says that if elected, he'll repeal the Affordable Care Act and replace it with something else, and promises he'll provide health coverage to people with pre-existing medical problems, but he doesn't give a hint how he'd manage it.

Insurance companies won't pay the higher costs of insuring these people unless they have extra funds -- which is why Obamacare requires that everyone, including healthy young people, buy insurance. Yet Mr. Romney doesn't say where the extra money to fund insurers would come from. From taxpayers? Businesses?

Talk about uncertainty.

Mr. Romney also promises to repeal Dodd-Frank, but here again he's mum on what he'd replace it with. Yet without some sort of new regulation of Wall Street, we're back to where we were before 2008, when Wall Street crashed and brought most of the rest of us down with it.

Romney hasn't provided a clue to how he proposes to oversee the biggest banks, what kind of capital requirements he'd impose on them, and what mechanism he'd use to put them through an orderly bankruptcy that wouldn't risk the rest of the Street. All we get is a big question mark.

When it comes to how Messrs. Romney and Ryan would pay for the giant $5 trillion tax cut they propose, mostly for the rich, they take uncertainty to a new level of abject wonderment. "We'll work with Congress," is their response.

They say they'll limit loopholes and deductions that could be used by the wealthy, but Messrs. Romney and Ryan refuse to be specific. Several weeks ago, Mr. Romney said he'd cap total deductions at $17,000 a year. Days later, the figure became $25,000. Now it's up in the air. Pick a figure, he now says.

Make no mistake: Wall Street traders and corporate CEOs are supporting Messrs. Romney and Ryan not because of the new level of certainty they promise but because they promise to lower their taxes.

Meanwhile, many of the Romney and Ryan allies who are attacking Mr. Obama for creating uncertainty are themselves responsible for much of it. They're the ones who have delayed and obfuscated Obamacare, Dodd-Frank and any semblance of a federal budget.

"Continued uncertainty is the greatest threat to small businesses and our country's economic recovery," says Thomas Donohue, president and CEO of the U.S. Chamber of Commerce, which has funneled tens of millions of dollars into ads blaming Mr. Obama for the nation's economic woes.

That's the same Chamber of Commerce that has been using every legal tool imaginable to challenge regulations emerging from Obamacare and Dodd-Frank -- thereby keeping both laws in limbo as long as possible. The Chamber even helped bring Obamacare to the Supreme Court.

At the same time, congressional Republicans have done everything in their power to scotch any agreement on reducing the budget deficit. Because they've pledged their fiscal souls to Grover Norquist, they won't consider raising even a dollar of new taxes. Yet it's impossible to balance the budget without some combination of spending cuts and tax increases -- unless, that is, we do away with Social Security, Medicare and Medicaid, or the military.

Business executives justifiably worry about January's so-called "fiscal cliff," requiring sudden and sharp tax increases and spending cuts. But they have no one to blame but Mr. Norquist's Republican acolytes in Congress, including Mr. Ryan, all of whom agreed to the fiscal cliff when they wouldn't agree to anything else.

Average Americans, meanwhile, face more economic uncertainty from the possibility of a Romney-Ryan administration than they have at any point in their lifetimes. Not only have the pair thrown the future of Obamacare into doubt, but Americans have no idea what would happen to Medicare, Medicaid, college aid, Pell grants, food stamps, unemployment insurance and many other programs Americans rely on. All would have to be sliced or diced, but Messrs. Romney and Ryan won't tell us how or by how much.

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