Posted on 10/12/2012 5:58:01 AM PDT by Kaslin
If Mitt Romney is elected and secures Republican control of both houses of Congress, the U.S. could be poised for a vertiginous economic snapback.
To understand how, consider that the Democratic explanation for our current malaise is utterly fallacious. Mr. Obama and his allies identify the "Bush tax cuts," "two wars that weren't paid for," and "deregulation" as the causes of America's present economic doldrums. But federal outlays as a percentage of GDP under George W. Bush averaged 19.6 percent. Under Obama, spending has ballooned to 24.1 percent of GDP. Much of Bush's spending was temporary (the two wars, one of which Obama expanded). But Obama's spending on new entitlements is permanent and bound to increase over time, further burdening a country already facing an entitlements crisis.
If President Obama really believed that spending "on a credit card" caused our troubles, he wouldn't have spent even more than Bush did, would he? He wouldn't have run up the debt to more than 100 percent of GDP or $16 trillion -- a figure, by the way, that Mr. Obama didn't know when David Letterman asked.
The Bush-did-it excuse also evaporates when you consider that the economy was starting to recover from the 2008 recession by mid-2009. According to Obama Administration figures, real GDP growth reached about 3 percent at the start of 2010. But it began to decline later in the year. What happened in 2010? The two signature initiatives of the Obama presidency were signed into law. Much has been written about the job-depressing consequences of Obamacare, less about the sclerotic effects of Dodd/Frank.
Dodd/Frank was the Democrats' answer to the financial crisis. Written by two men who contributed handsomely to the housing bubble, the law ignored Fannie and Freddie. It was supposed to prevent systemic threats to the financial system and prevent "too big to fail" banks from endangering the economy. Instead, it enshrined "too big to fail" -- which is why Mitt Romney described it as a "big kiss" to Wall Street banks.
Just as Obamacare creates an unaccountable board of 15 "experts" to dictate Medicare spending decisions, Dodd/Frank gave the new Consumer Financial Protection Bureau broad authority to regulate banks, credit unions, securities firms and a variety of other businesses. Yet the CFPB itself is totally unaccountable. Congress has no oversight as it doesn't have power of the purse. CFPB gets its funding from the Federal Reserve. By the terms of Dodd/Frank, the president can remove the bureau's head only under very limited circumstances. And the power of the courts to review CFPB actions is strictly curtailed. "As a whole, Dodd-Frank aggregates the power of all three branches of government in one unelected, unsupervised and unaccountable bureaucrat," explained former White House Counsel C. Boyden Gray, who is challenging the constitutionality of the law.
Dodd/Frank weighs in at more than 1600 pages, and has already spawned more than 8000 pages of regulations -- about 30 percent of the estimated total. Many small banks believe Dodd/Frank is putting them out of business. The Wall Street giants can afford to hire compliance officers, but smaller banks are crippled by the regulations. Compliance costs are cutting into banks' profit margins and limiting the capital available for lending.
Beyond compliance costs, banks and other institutions are stymied by the uncertainty about the 70 percent of Dodd/Frank regulations that have yet to be issued.
Even without tax reform, Mitt Romney and the Republicans could jumpstart an economic resurgence if they did just three things: 1) repeal Obamacare, 2) repeal Dodd/Frank and 3) and reverse the Obama policy of hindering domestic energy production.
As Walter Russell Mead documents in a fascinating series in the American Interest, the United States stands poised to become the world's largest producer of fossil fuels. "The energy abundance that helped propel the United States to global leadership ... is back; if the energy revolution now taking shape lives up to its full potential, we are headed into a new century in which the location of the world's energy resources and the structure of the world's energy trade support American affluence at home and power abroad."
But it will require a president not ideologically blinkered by a ruinous commitment to "green energy."
U.S. businesses are sitting on an estimated $2 trillion in liquid assets. They've been frightened into inaction, waiting for a better climate. It may be at hand.
I never understand why the republicans never go back to the early Bush years. In the aftermath of 9/11, tens of thousands of jobs were lost and the travel and service industry were battered. President Bush brought us back. Unemployment was at about 5.3% for almost all of his first term and half of his second. I remember there were so many unfilled jobs they were hiring retirees back. Illegals were doing the jobs they said Americans didn’t want. I think it needs to be hammered home that when the democrats took over Congress the last two years of the Bush administration — that’s when the downward spiral began. We recovered economically faster from the great depression AND 9/11. Obama’s 1.3% GDP at the end of his first term is inexcusable.
Hit the reset button with a sledge hammer and pray that it works.
Mitt Romney needs to, truly, become a very small government conservative, and then, among many other pro-conservative actions, Mitt needs to, truly, overturn everything involved with, both, The New Deal and The Great Society! Then, I’ll be very impressed with Mitt Romney.
I have predicted that on the day after a Romney/Ryan win, plus regained GOP control of both houses of Congress, the Dow 30 will soar by 3-5%, and continue upward in a freakish run.
I agree with the author of this piece about Obamacare, but will go further in saying it is the single most damaging piece of legislation ever passed by the US Congress.
Note - the democrat party owns Obamacare lock, stock and barrel, and this point needs to be driven home by Romney and Ryan.
We’ve got lots of debt, massive entitlements and aging boomers. Islam and Latin America are also infiltrating.
If this economy gets unshackled and grows, great. But we’ve got some problems in our very soul, and a dynamic economy isn’t the only answer.
Is Mona finally ready to come back from the Darkside? After all, you can get fired from CNN for writing articles like this that actually speak the truth about the failed economic policies of the Obama administration.
I agree these three things would have the most impact, but I hope Sarbanes-Oxley is also on the Romney hit list, and spending needs to be cut drastically for all of the above to do any good.
The second wave is going to be worst than the first. Really wish people would stop playing politics about this issue. Every time they do, I realize that they don't know what they are talking about.
Exactly, the worldwide economy was crashed by the 2006 Pelosi/Reid RAT-Congress.
Senators Obama and Biden were both in the majority of that body and are responsible for "the mess that Obama inherited"...not GW Bush.
Ping.
BTW...Kaslin always has the best posts.
A couple of things...
When the economy “snaps back”, we’re going to see massive inflation due to the “printing” of so much money through the QEs.
Another thing - the economy is still going to crash, and crash hard. It may be delayed a bit with someone who is not actively pursuing a crash.
The main thing is having a non-communist in power to pick up the pieces.
Indeed. Economic issues aside, who's helming the ship is one thing, but who's swabbing the deck and tending the engines is another.
What about America's human capital? If we fixed the education system today, the first complete products of it wouldn't graduate high school until 2030.
Who will be working, voting...barely paying taxes in the interim?
I'm not knocking Romney, but I expect the best we can hope for is some limited modification of these policies. Progressive thugs at every level of the government/media oomplex will wage a Holy War rearguard action to save these pillars of their faith, and I don't think the John Boehners and Lindsey Grahams are ready to take the media heat necessary to effect any genuine change.
If anything positive happens, it's going to have to be before July, 2013 - and perhaps by executive order.
They won't be perfect, but they WILL make for a pro-business environment and pro-construction culture. I heard there's about $1.4 trillion in liquid assets that businesses are holding...when Romney gets elected, look for business to start investing again.
“Then, I’ll be very impressed with Mitt Romney.”
Given all the task at hand for Romney to take on, Repealing Obamacare, fixing Medicare (per Ryan’s plan), Repealing Dodd/Frank bill, fixing SS, energy independence, military rebuild, Fed and Supreme Court judicial appointments, Balanced Budget Amendment, Auditing Fed Reserve etc...
Romney will have in his hands, the opportunities to catapult himself up to the higher echelons of presidential greatness.
That said, We will have to see. He wasn’t my first choice or any choice because of his RINO’isms. But current fiscal and international circumstances that are so dire now may very well push Romney well to the conservative side of governance.
Case in point, the first debate. Romney came out and thoroughly energized the conservative base.
Second point, the electorate has already in primaries elected to run more conservative senators and congressmen. I think of Ted Cruz, from 2010 Mike Lee. Just the booting of Sen. Richard Lugar was stunning.
Given that these more conservative leaders are elected, Congress will push way more to the conservative side.
Bump
Thanks
Fairtax people keep saying that there is about 11-12 trillion dollars held outside of the USA. Purposefully not being brought in to the USA to shield it from confiscatory levels of taxation.
Sooner or later other countries will figure out that dropping corporate taxes, capital gains taxes much lower than the USA’s rates will attract that investment capital. Capital goes where it is treated best they say.
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