"Economists Agree Romney’s Plan Would Spark a New Recession"

Economists Agree Romney’s Plan Would Spark a New Recession

By Sarah Ayres, Heather Boushey at the Center For American Progress

http://www.americanprogressaction.org/issues/2012/07/romney_economic_plan.html

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The House Republican budget developed by Rep. Paul Ryan (R-WI) would fund $3 trillion in tax breaks for the rich by ending guaranteed Medicare coverage for our elderly and slashing middle-class investments in education, infrastructure, and research. This no-growth budget provides a starting point for Romney’s economic plan, which then goes further down the path of austerity and will enact substantially deeper spending cuts. Romney does not specify how he would cut federal spending but he has promised to cut taxes while also capping federal spending and balancing the budget. In order to meet these constraints, his plan would require extraordinary cuts to federal programs.

The result would bring more austerity and less growth. According to an analysis by the Center on Budget and Policy Priorities, “by 2022, if the [federal] budget had to be balanced while taxes were cut,” which is Romney’s goal, “the proposals would require cutting entitlement and discretionary programs other than Social Security and core defense by more than half.” Specifically, the Center for Budget and Policy Priorities estimates that Romney’s proposals would deplete Medicare, Medicaid, and the Children’s Health Insurance Program by $3.4 trillion over the next 10 years. In addition, the nonpartisan think tank says that, under Romney’s plan, compensation payments for disabled veterans would be cut by one-quarter, and 13 million people struggling to put food on the table for their families would be kicked off the Supplemental Nutrition Assistance Program.

None of this would create jobs—never mind Romney’s claims that austerity for almost all of us will lead the wealthy to invest more in job creation. In fact, what it would do is undermine middle-class economic security, which in turn would lead to less spending and more and more families struggling to make ends meet. These kinds of cuts will hurt our economic future because we won’t be making the kinds of investments—in education or infrastructure—that will drive future growth.

We have already seen the effect austerity has on economic growth and it is not pretty. For the past two years, Republicans in Congress have inflicted an austerity regime that has held back job growth and slowed the economy. The Republican-led House of Representatives has repeatedly refused to consider measures like the American Jobs Act, which would spur growth and reduce unemployment by beefing up aggregate demand. By refusing to act, Congress has ensured that huge job losses in the public sector drag down overall employment levels.
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