Republican Debate Economics (8-11-11)


As the Republicans debated economic issues in Iowa, including the recent increase in the Debt Ceiling, many demonstrated an intellectual dishonesty, as they again pledged not to raise taxes, but simultaneously supported costly military expeditions abroad, two positions that will certainly force the U.S. to borrow billions.

TAXES: Gingrich continued to shovel the idea that tax cuts will led to growth, while Santorum and Cain, respectively, want to reduce to zero the Corporate Income Tax, and Capital Gains Tax.

BORROW-SPEND: The Republican refusal to raise taxes has led to borrowing and spending, which has sunk the nation deep into debt, leaving only two choices: 1) increase the Debt Ceiling and borrow so creditors who lent the money can be paid, or 2) default.

DEBT CEILING: Congresswoman Michelle Bachmann demonstrated a stark ignorance regarding the economy, as she condemned her Republican colleagues for increasing the Debt Ceiling. She confused the issue by saying those who voted for an increase gave Obama money, when in fact all they did was prevent a default on loans already made. The new kid on the block, Herman Cain, also opposed an increase in the Debt Ceiling.

Former Utah Gov. Huntsmann, a voice of reason, said he would never let the U.S. default and called the National Debt a cancer. Former Sen. Santorum also said the Debt Ceiling had to be raised, but Romney just talked about upgrading the Mass. credit rating.

U.S. BUDGET: As to the Budget, Congressman Ron Paul wisely said if there are going to be any federal cuts, military budgets have got to be on the table. Former House leader Gingrich, criticized the Committee of 12, which was convened to resolve budget issues.

FEDERAL RESERVE: Paul’s weakest area is his distain for the Federal Reserve Board. As to monetary policies that have kept interest rates low, Paul was critical, saying they only distort the economy. Apparently, he does not think they will stimulate economic activity. At one point Paul said the U.S. owes the Federal Reserve 1.6 trillion, and the Fed should be audited. Paul’s comments were obviously popular with the partisan crowd, as they booed Santorum for attacking Paul. Gingrich joined Paul saying it is a scandal that the Fed deals with billions in secret, and does not explain who is bailed out, or why.

FREE TRADE & JOBS: On the issue of jobs and trade, Santorum, who consistently supported Free Trade while in the Senate, correctly pointed out the number of Americans employed in manufacturing dropped from 21% to 9%, but he offered no solutions. Romney said we need trade policies that work for us, but he also failed to give any details. When he was asked to explain why people were laid off from companies he owned, he had little to say.

ENVIRONMENTAL PROTECTION AGENCY: Regarding the regulation of the environment, Huntsman, who owns a global corporation, said the EPA does not let businesses expand, and accused them of running a “reign of terror.”

HEALTH INSURANCE: On the economics of health, all of the Republicans of course piled on against the law the Democrats passed in 2009. Pawlenty said the Obama health care plan was modeled after Romney’s in Mass. Romney said the Mass plan was for one state, and the President’s is a one-size-fits-all, for the entire nation. He promised to grant waivers to any state that requested one.

As to the mandate to make people buy health insurance, Romney argued all have a personal responsibility to buy it. Paul said the insurance and drug companies love the mandate, and thought only doctors and patients would suffer. Bachmann thinks the government has no authority to force people buy health insurance, a position her activist right-wing friends on the Supreme Court will likely endorse. Gingrich suggested repealing Obamacare, but like the others, offered no answer to the health insurance crisis.

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