Ezra Kline hosted the Maddow show the other night and compared Obama's budget and Romney's.
As he put it... there is rhetoric and then there are the numbers which may be the closest to telling the truth that a politician can get. Budgets show how much money is coming in and what they are spending it on. What is just as important as what they spend it on... is what they don't spend it on.
Budget's show the priorities of the person who drafted it.
In the case of Romney... we know how much revenue he will be bringing in... we know what he has promised to spend it on... we know he has promised to balance the budget... so... what do we know???
Romney's budget will cut into spending 2x as much as Ryan's budget and in order to meet his stated objectives he would have to cut all the domestic spending programs, including Medicare and Social Security by 36%!
As Ezra Klein says the impact of Romney's budget proposal "isn't pretty", but what exactly would its impact be on the economy?
Remember when ABC News got a hold of a confidential report from Goldman Sachs to its investors that examined the Ryan budget?
Goldman Sachs: House Spending Cuts Will Hurt Economic Growth
A confidential new report prepared by Goldman Sachs for its clients says spending cuts passed by the House of Representatives last week would be a drag on the economy, cutting economic growth by about two percent of GDP.
“Under the House passed spending bill [which cut spending by $61 billion],” says the report, which was obtained by ABC News, “the drag on GDP growth from federal fiscal policy would increase by 1.5pp to 2pp in Q2 and Q3 compared with current law.”
http://abcnews.go.com/...
The US GDP growth rate was on average 2.8% for 2011 and Goldman Sachs economists estimated that the Ryan budget would have reduced it to between 1.3% and .8%.
I'm not an economist, but based on Klein's analysis that Romney's budget cuts spending twice as deep the Ryan budget, does that mean that his budget would reduce the GDP by 3% to 4%?
If so that would put us into negative number territory and that means a recession close to what we had in Q4 of 2008 under Bush when we were in a tail spin economically and companies were shedding millions of jobs!
Any of you economist on this site, feel free to talk me down from this at any time, but what I see in the Romney budget is a disaster waiting to happen!
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