Super Tuesday: Romney’s Fairytale Budget

It is “Super Tuesday” in the Republican primary elections. Ten states will single out who they believe should meet Barack Obama in the fall’s main race. Mitt Romney is still the favorite, but Rick Santorum can take Ohio and Newt Gingrich will certainly win in his home ground, Georgia.

What type of president would each make? Romney, especially, claims to have the solution for the USA’s economy. He refers to his merits as a business leader, even if he often trips over his words and all too clearly shows off his considerable wealth.

Romney’s tax proposals favor himself, but are pure pie-in-the-sky. He promises to reduce federal tax revenues to 17 percent of the GNP, but the target for federal spending seems to be a reduction to 20 percent. The result can only be greater debt.

Romney, however, maintains that his plans will not affect the budget balance. Firstly, tax deductions will be withdrawn and federal revenue reduced and secondly — and foremost — the proposals will ignite economic growth.

Certainly tax reduction can have dynamic effects. However, many different factors influence growth and it is always risky to count on money that has yet to be seen. Romney is simply guessing that his numbers will add up. Besides, he fails to say which deductions shall be suspended or how he will make savings in the federal budget.

Common to Santorum’s and Gingrich’s tax packages is that the reductions are greater, while savings and growth forecasts are even more imaginative.

Any who might take an interest may recall that the USA has a gigantic budget and a soaring national debt. George W. Bush’s tax cuts in the beginning of 2000 hardly created fantastic growth; on the contrary, they contributed strongly to the creation of America’s budget problems as far back as during the good times before the financial crisis.

The USA needs to simplify and reform its taxes. The large social benefit programs are not sustainable in their present form and Obama doesn’t seem to have any other plan to reduce the deficit except by squeezing the rich.

It seems however that a new Republican president will turn out to be a fiscal nightmare.