Responding to criticism that they have no plan to pull the country out of economic crisis, Republicans have begun rolling out a variety of new plans they say will fix everything. The response from progressives thus far is that almost all the new ideas smell like old ones that never worked out.
Unlike Newt Gingrich and Sarah Palin, who have been railing about a proposed mosque in New York, Mitt Romney unofficially launched an early bid for the presidency this week by rolling out an economic plan. The only plus progressives find in his plan is that he has one. Some are willing credit him with being one of the few GOPers who, unlike Gingrich and Palin, recognize that people care more about a job and an income than they do about where a house of worship is located in Manhattan.
Beyond that point, however, progressives are saying the Romney plan will not work.
The central plank of his plan is to slash taxes on businesses and on big business investors, on the theory that this will allow businesses to get more capital at less cost and, in turn, create more jobs.
“Anyone looking at the economy today would see this is nonsense,” said Robert Reich, professor of Public Policy at the University of California at Berkeley. “American corporations have an unprecedented $1.8 trillion of cash. In other words, businesses have all the capital they need. It’s pushing on a wet noodle. Businesses create jobs only if consumers are pulling the noodle from the other end.”
Reich said businesses are raising profits by cutting costs (mostly by laying off even more workers), shifting operations abroad where they can find consumers, and buying up their own shares of stock and that Romney’s tax breaks would only worsen all this. Reich said that if Romney were really serious about increasing jobs he would focus on increasing consumer purchasing power and that this could be done with mortgage and credit debt relief, payroll tax cuts for ordinary workers, mandatory severance packages for workers laid off by profitable companies and public works jobs programs.
Progressives have also challenged proposals made last week by Rep. Paul Ryan R-Wis., who wants to repeal health care reform and “re-vamp” Medicare with a “voucher” system.
“Your health tax credit of $5,700 per family won’t go far for average Americans,” said Matt Miller, a senior fellow at the Center for American Progress, in an open letter to Ryan, “when the most popular preferred provider organization family plan enjoyed by Congress today runs about $14,000…Will you acknowledge that your road map plan doesn’t reduce national health costs, but just limits Uncle Sam’s exposure? And even if this step were sensible it has little to do with the real challenge of re-engineering America’s radically inefficient health sector?”
On Wednesday, Rep. Roy Blunt, R-Mo., who is running for his state’s open Senate seat, released his “jobs plan” at a party sponsored by the U.S. Chamber of Commerce. The main piece involves continuation of the Bush tax cuts for the rich. The second part of the plan, not a plan at all, expounds on “job-killing Obama policies.”
“But one aspect of the ‘plan,’ in particular, caught my attention,” writes The Wonk Room’s Pat Garofalo. “Blunt spends a lot of time in the document fearmongering about the deficit, saying ‘we must put a stop to this reckless and embarrassing culture of running up the bill and passing it along to our children and grandchildren.’ He even advocates rescinding the stimulus money that has yet to be spent, which amounts to a tax on the middle class, as $65 billion in remaining stimulus finds have already been dedicated to middle class tax cuts.”
Jonathan Chait, writing in the New Republic, reminded his readers yesterday that “the current bout of right-wing economic hysteria is the exact same thing that happened in 1993 when Bill Clinton passed a deficit reduction bill that raised the top tax rate. It was class warfare, socialism or worse.”
Articles in Forbes and Fortune at the time urged rich people to give up their citizenship or flee the country in order to avoid Clinton’s “punitive” anti-rich policies. There were bumper-stickers, Chait noted, depicting the “C” in “Clinton” as a hammer and sickle.
Moneywatch’s Mark Thoma took on the failure of all the Republican plans to address the need to strengthen consumer demand. Rejecting the Republican view that we can’t do anything about high unemployment because it is “structural,” he said, “Creating more demand through an additional stimulus package would help to spur demand at businesses leading to higher profits, more confidence, and importantly more investment in structural transformation activities.”
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