Random Romney Economics

With former Massachusetts governor Mitt Romney only a space alien abduction away from becoming the Republican presidential nominee, the natural question becomes, “What does this guy believe in anyway?” Well, who ever really knows exactly what a politician believes, Democrat or Republican, but here are a few indications of the sort of economic impulses a Romney administration might have.

In the man's own words…

Stimulus
Though he strongly opposes the American Recovery and Reinvestment Act of 2009, Romney did have this to say about the concept of government stimulus spending in general.

“I think there is need for economic stimulus. Americans have lost about $11 trillion in net worth. That translates into about $400 billion a year less spending that they'll be doing, and that's net of additional government programs like Medicaid and unemployment insurance. And government can help make that up in a very difficult time. And that's one of the reasons why I think a stimulus program is needed.”

Housing Market

“As to what to do for the housing industry specifically, and are there things you can do to encourage housing? One is, don't try and stop the foreclosure process. Let it run its course and hit the bottom. Allow , put renters in them, fix the homes up, and let it turn around and come back up. The Obama administration has slow walked the foreclosure processes that have long existed, and as a result we still have a foreclosure overhang. Number two, the credit (that) was given to first time homebuyers was insufficient and inadequate to turn around the housing market. I think it was an ineffective idea. It was a little bit like the cash-for-clunkers program, throwing government money at something which was not market oriented, did not staunch the decline in home values anymore than it encouraged the auto industry to take off. I think the idea of helping people refinance homes to stay in them is one that's worth further consideration. But I'm not signing on until I find out who's going to pay and who's going to get bailed out, and that's not something which we know all the answers to.”

Taxes

Perhaps the best way to judge what a President Romney wo

uld do in the area of taxation is to look back at his governatorial stint in Massachusetts.

As Governor, Romney opposed an increase in federal gas taxes and supported the second round of Bush tax cuts. In 2007, Romney said that he had supported the Bush tax cuts overall. By the end of Romney's term as governor, declining aid from the state to localities caused property taxes to rise by five percent to their highest level in 25 years. The state and local tax burden in Massachusetts increased from 9.9 percent in 2003 to 10.3 percent of per capita income in 2005, before falling back to 9.9 percent at the end of Romney's governorship in 2007, according to analysis by the Tax Foundation. To help get the state out of debt, Romney doubled fees for court filings, professional regulations and firearm licenses, raising $400 million in the first year of the program. Romney also increased the state gasoline fee by 2 cents per gallon, generating about $60 million per year in additional revenue; the fee is in addition to the 21-cent-per-gallon state gas tax. Romney approved $128 million in tax changes such as sales tax from purchases on the Internet and raised another $181 million in additional business taxes in the next two years; businesses called these changes tax increases, but Romney defended them as the elimination of “loopholes.”

Romney has supported tax relief for all Americans and has advocated eliminating the capital gains tax for all those who earn less than $200,000 per year. Romney has also supported eliminating the estate tax, known by opponents as the Death Tax, signed a pledge to oppose “any and all efforts” to increase income taxes, and promises to control spending by Congress. Romney has supported a balanced budget amendment to deal with the burgeoning federal deficit. He has stated that deficit spending results in devaluation of the dollar and a decline in the economic stability of the United States. He has proposed reining in growth in entitlement programs. He has also proposed eliminating pork-barrell spending on unnecessary programs.

So is the Mittster a genuine economic conservative who simply dabbled in borderline policies because he served in perhaps the most liberal state in the union, as some would calim, or is he truly a tax and spend wolf in Republican clothing? At this point, no one knows but Romney himself, but this particular presidential contest is about to get more interesting.

The American Monetary Association Team

Flickr / Austen Hufford

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