On Thursday, Romney blames President Obama for "revised GDP numbers that revealed the economy grew more slowly in the second quarter than originally thought." This article posted on CNN, talks about how Romney believes that Obama is to blame for the slowing growth of GDP. (link)
Romney claims that Obama has been using the same policies for the past 4 years, and its causing the health of the economy to decline.
He also commented on Obama's ideas for military, and that "The idea of cutting our military commitment by a trillion dollars over this decade is unthinkable and devastating."
Any thoughts? Is Obama to blame?
Since the same policy has been used for four years and has not been working, maybe Romney does have a point about the need for economic policy change. Since Obama is cutting trillions on military this might help the budget deficit and even might increase in other areas where the economy needs them and possibly into expansionary fiscal policy.
ReplyDeleteI agree, I feel that he is making a good point that maybe the we need to try some new policies. I also agree with you in the point that the cuts in military would also help the economy to improve. I remember talking in class about trying new policies, instead of old ones that haven't worked, or coming up with new ones that will help us see results instead of what we think will happen and it ends in failure. The question is, will Romney do this? Or is he just pointing out Obama's flaw in the policies of the past.
ReplyDeleteI find it difficult to see the line between short run and long run economic plans. As far as I am concerned, and as much as I know, there are no quick fixes that are healthy for the long run. I think Romney's promise of a changed economy with his policy is pretty short sighted. However, if Romney is elected, I do think Wall Street will have an increased confidence in the economy, and that's something Obama can't really offer.
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ReplyDeleteThe military is one of the greatest stimulus packages the United States has to offer, it provides jobs for a large array of labor markets and through the Research Development and Production of increasingly technologically advanced weapons systems the ripple effect of the money used to fund them is felt in places across the country where the contracts can be had. Furthermore the money spent in many areas of research moves beyond a weaponized or military form and can enter mainstream use improving the lives of even more Americans [robotics, prostheses, energy development (I.E. money to develop naval grade biodeisel from algal/ plant sources which once optimized in production can be used to replace petrol sources)]. These benefits though must be weighed against the effects of the debt, and other places where funding could be cut without significant effect. Perhaps increasing military spending temporarily at the expense of some other programs could help boost the baseline consumption in the economy. This type of benefit though I think could be derived from another infrastructure investment program whose output is in much greater need than a warmongering military expansion. Still in any scenario the decisions that are needed are difficult ones...
ReplyDeleteIt is true that Obama has not been able to fix the economy in the last four years as fast as it was expected. But I don't expect Romney would have done any better. Bush add trillions of debt when he got elected and Romney's plan to improve the economy does not look too impressive either.
ReplyDeleteIt has been well established that the economy is not controlled by one man sitting in the oval office, nor is it even really controlled by the government. At best, politicians can attempt to cajole businessmen to invest, but over the last century, and especially the last two decades, we have built unrealistic expectations for what the economy can do, and the economy is likely still inflated. Perhaps politicians should be worrying more about the effect of a trillion dollars of debt which we are adding to rather than the quarterly budget projections. the difference between 1.7% growth and 1.2% is minuscule, and given that we just experienced the worst drought in the US since the dust bowl, perhaps the economy should be praised.
ReplyDeleteIf we were more realistic about the kinds of growth we should expect in non-boom times, people would feel better and more secure in investing in the economy. It may be the case that any growth above 4-6% without massive technological improvements (and we have not even really had many minor ones)implicitly results in inflation. Essentially, we may all be too myopic with the economy, and as a result, we base our investments on the growth we want (and in the very short term) rather than what is reasonable and sustainable. As a result, we deter investors in bear markets and may actually slow the development of technology that could lead to real improvements in the economy. Perhaps we should view bear markets as the status-quo, and bull markets as the markets as exceptional. This paradigm shift could make us more deliberate about research and innovation, rather than viewing the economy as a thing that should automatically make us all rich while we do exactly what we did the year before.