25 votes

Romney Argues Big Spending Cuts Would Cause 'Depression,'

"Asked by Time's Mark Halperin Wednesday why he wouldn't push major cuts in his first year, Romney responded with reasoning that would be largely uncontroversial if not for the past two years' mainstreaming of an economic philosophy that insists government spending actually costs jobs, rather than creates job.

"Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5 percent. That is by definition throwing us into recession or depression. So I'm not going to do that, of course," Romney said in an answer picked up by former bank regulator William Black, a HuffPost blogger."

He's basically abandoning the GOP base with this comment. Surely he will be "walking back" this comment in a few hours.


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Deficit is a trillion too

US budget deficit is over a trillion dollars. To say that cutting spending by a trillion dollars would reduce the GDP by 5% is sobering. The Federal Government should never have been to grow to such a huge portion of the GDP anyway. Also, what ever the government is producing, it does with a high degree of waste. That 5% of GDP then represents a 5% of inefficiencies in the economy. Getting rid of the 5% would actually be a reduction in the costs of running the country. Cut out the fat so to speak.

1. hey mitt you sure you wanna answer that question

without consulting your lawyers first?

2.define the terms depression and recession mitt, what would you call the pain in endured by the masses at this moment.

3. would cutting spending and taxes hurt the people mitt?

4. how much do you want to spend mitt?

5. where does one get a trillion dollars mitt?

We need to be $18 Trillion in debt

before we can do any thing! This is exactly where the US debt will be after 1 year under Romney. Doesn't make any sense, he has been listening to the CFR bunch.

Romney has been taking lectures like CFR 101.

Gold standard: because man can not be trusted to control his greed

Breaking Windows is Not Productive.

Government stealing money and blowing it on stupid things, is not a real part of GDP.

Romney is spouting Keynesian nonsense.

Great videos on the Broken Window Fallacy:



Check out the Laissez-Faire Journal at LFJournal.com

"The State is a gang of thieves writ large." - Murray Rothbard

Well, he's right...in a way.

In order for us to get our house in order, we're going to have to experience a slight recession. It would take a little while for the private sector to absorb the loss in government jobs, but after a year or so, we would be in full economic recovery if taxes and regulations were cut as well. It's the same with the propping up of bad debt. It's obvious Romney isn't willing to do what it would take to put the U.S. back on the right track.

"our house"

I did not borrow a single dimee MY house is in order, I am not the U.S government so how is this debt mine? just a thought and i agree it will be painful but so are dentist procedures but you do it so you dont have to wear dentures! lol

I'm Just baffled!

that people vote for this guy:S

he's such a dummy...

i dont think the federal government PRODUCES 1trillion dollars in legal GDP.

they should've asked him HOW he thinks the GDP will shrink by 5% and watch him give this type of response: http://www.youtube.com/watch?v=xbZEq6wOdnY

so the govt takes our money

and maybe gives back 1 dollar for every five it takes. How the hell does that help? Having Americans spend or save the five dollars is preferable to the govt picking winners and mostly losers.

Just getting rid of the tax code and going with a constitutiona l excise tax would save half a trillion in compliance cost plus the bean pushers would have to get productive jobs helping the economy even more and best of all it would turbo charge investment and economic activity.

Romney is an idiot and a crook -you can quote me -I rather have Obama than a big govt Bush or Romney any day of the week

Government is supposed to protect our freedom, our property, our privacy, not invade it. Ron Paul 2007

He will Flip flop that comment

It wont shrink GDP and we are still in recession mitt, unemployment is really at 16% not 8.1% as the propaganda MSM states. Cutting 5 dept agencys is not gonna do anything to GDP, currently growth of GDP is less than 3% so do the math.

Follow Eurpoe and even Mexico lots of stuff going on; People are not happy and are taking it into there own hands. Our time will come soon

Having this part of the Public DEBATE

...is a major step forward. They used to just ignore the question. Of course, R-Money's statement is a big lie.

The solution is to reduce spending.

Tricks and treachery are the practice of fools, that don't have brains enough to be honest. - Ben Franklin


Would imply disagreement, he's in full agreement with the "other" side


Goes to show you, just because you can make a buck in the present economic climate, doesn't mean you understand how that economy works.

What an upside down fucking world we live in now where reducing waste is looked at as damaging to an already bloated and out of control economy.

Patriot Cell #345,168
I don't respond to emails or pm's.
Those who make peaceful revolution impossible will make violent revolution, inevitable.

Carbon cap is next, then free abortion on demand

Obomney is determined to be Obama in all respects. There's no way to differentiate them except that one is called Willard and one is called Barack; and the meaningless fact that Willard isn't Barack is enough for Red State 'tards.

Take back the GOP and Restore America Now.

yes, that's the typical neo-conservative . . .


it's hard to be awake; it's easier to dream--

that nitwit,

Doesn't grasp the concept that we are in a depression already, might as well have 2-3 more bad/hard years for a decade of growth and shrinking the debt.

Freedom may be worth searching for.

I have given up on my fellow Americans, (not DPers) as I will not shed one more calorie trying to awaken anyone else who is not a critical thinker and does not have the inherent feeling that something is wrong.

It's not a depression for Wall Street

They will need QE3, 4 and 5 to keep the gravy train rolling.

What really causes depression?

The answer is high prices, high levels of debt, and fear.

How does this work.

We have a monetary system where money is created out of thin air and loaned into circulation; in 1932 M2 was $50 billion and today it is $10,000 billion. When the new money enters circulation it stimulates economic activity (boom) but this drives up prices. At higher prices the money supply buys less, so this is the automatic delayed contraction counter force that comes from inflation of the money supply.

Since the money is loaned into circulation, the loans will come due, and when the principal and interest are repaid, this drains money from circulation back into the banking system. This is the second contraction force.

When things start going south, fear arises and this is another contraction force.

From the last depression of the 1930's until 2007 there were a series cyclical expansions and contractions against a background of longer term expansion. The federal government and the Federal Reserve Bank attempted to manage money growth and government spending to overcome the contraction forces of high prices, high debt and fear each time they became stronger than the expansion force of inflating the money supply. Each time the price levels and debt levels grew to new heights.

If you remember, back in 2007 we had very high prices, (housing bubble, and $5 gasoline) and finally the financial system began to crumble under the weight of these prices and the heavy burden of high debt. Exuberance turned to fear. A massive injection of reserves into the banking system to encourage them to create more money was a failure; the accumulated forces of contraction were just too powerful. All the FED managed to do was to keep prices and debts moving up to postpone the inevitable deflationary collapse.

So to summarize, depression is caused by the monetary system we use that allows new money to be created out of thin air. When prices and debts become too large relative to the economy, depression arrives. This system is unstable, unsustainable, predatory (drains wealth from the public to the banks as interest is paid), and unconstitutional. It is the boom / bust system. It is a system of counterfeit money. It is a system of theft. It produces a skew in wealth distribution where the few have most of the wealth and the many march down the road to poverty.

There is no exit other than some form of collapse. Since all our money is bank debt that cannot be repaid, the present money will fail. This may take the form of banks closing, wiping out the checking, saving, and CD balances of those holding them, no matter what insurance you think you have. It may take the form of a shift by the government spending their own bills of credit into circulation making the value rapidly depreciate. If likely will bring us to the point of revolution.

There was a reason the Founding Fathers authorized Congress in Article 1, Section 8 to COIN money, and prohibited the States in Section 10 from making anything but gold and silver COINS legal tender. The passage of the Federal Reserve Act in 1913 and the eventual withdrawal of gold and silver coins from circulation and ending gold settlement from international settlement has brought us to this unfolding disaster.

My solution would be to take what gold and silver the federal government holds and mint it into coins, distributing it to the public pro rata so that we will have money to use as the old system collapses. Encourage miners to bring their gold and silver to the US mints to be coined by eliminating seigniorage, i.e., issue coins that are not partially debased.

Separate deposit banks from lending banks. Require gold and silver deposit banks to maintain 100% gold and silver reserve against deposits.

Enforce Article 1, Section 10 that prohibits States from making anything but gold and silver COINS legal tender, and which would automatically make Federal Reserve Notes illegal tender.

One way or another there is going to be a financial collapse. Better that we have a way to come out of it using gold and silver coins as legal tender than to have it drag on for a decade by propping up the present system, attempting to keep prices high, and keep the debts in place. Debt default and price decreases will eliminate the present system. To attempt to keep it in place will result in revolution.

I suppose most people alive today think debt is the way to buy things. This is not the case. When you borrow to buy you pay extra because of the interest; houses, for example usually cost twice when the interest is added. When there is unlimited money creation the federal government can be as large as venal politicians demand. Without the "out of thin air" money system the federal government is limited in size to what they can tax without causing a revolt. The supply of debt in the economy is limited to what gold and silver coins people are willing to not spend and instead lend, and this keeps debts levels relatively low. Any fluctuations in the economy are related to natural forces and not the artificial boom/bust force of artificial money. There is a reason that gold and silver are the money of a free society.

If for no other reason than the monetary system, we must elect Ron Paul. The alternative is to keep depression alive and well for a decade which will bring revolution as the pain and suffering from keeping the present system will just be too great. Romney and Obama are the champions of the Federal Reserve. Ron Paul is the champion of freedom.

"Bend over and grab your ankles" should be etched in stone at the entrance to every government building and every government office.

Congress will borrow more, put everyone deeper in debt

To keep the Federal Government from suffering a depression.

But leaving a trillion dollars in the productive economy would have immediate benefits by leaving us all free to spend the fruits of our labors as we wish.

How do we keep Congress from borrowing more?

Free includes debt-free!

Veto any rise in the debt ceiling?


"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

Override veto is possible.

We need a new Congress. This one hates us for our rights. So they pretend to take them away.

No single point of failure plan is needed.

Free includes debt-free!

Executive Order 11110

has never been repealed..... That's a start.

It makes no difference.

Can you imagine giving the present lot the power to print debt free money? Centrally issued money whether by a private cartel or the Treasury is a mirage.

For a free society to come into being money must arise naturally as a product of the application of Labour to Land. Mercantilism, the mixing of lawmaking with business, which is what we have had for hundreds of years to one degree or another, will destroy a nation eventually. Apparently in New Jersey there is a saying "make a law make a business". That says it all. A truly free market does not require man made laws to work.

Creating monopolies in any field BY LAW will always end up in stagnation. That is where we are now. There is no escape. We must experience a cleansing eventually, it is inevitable. Dr. Paul's solutions, will in my view, work.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

In any group of 100 economists you will have 101 opinions.

Perhaps someone should tell Mr. Romney that America is already in a depression although that fact has not yet percolated up to the top of the pyramid.

The "money" being printed by the Fed is flowing into risk free speculation in US Treasuries and crowding out credit for small and medium companies. If the Fed were not offering this win-win profit machine to the primary dealing banks then the credit would be available for lending to businesses.

If the economy is allowed to adjust freely, and Jim Grant at the Fed has closed the discount window to speculative borrowing short to lend long, interest rates will begin to rise as the economy recovers and the debt will begin to fall. e.g. If rates went to 12% then the mark-to-market value of Treasury debt would fall to $4 trillion from $16 trillion. The same would be true for corporate debt and balance sheets could begin to recover. At the moment companies are going bankrupt and don't realise that it is because interest rates are falling.

The introduction of competing currencies would hasten the flow of speculative funds out of the bond market into the commodities market to stabilise revenues for primary producers and encourage investment in capital goods. Rational lending to real buyers would be encouraged by higher rates.

Mr. Romney's problem is that he is taking economic advice from his lawyers who love big government and the constant supply of laws and regulations to keep them busy. He is also probably talking to Paul Krugman who like him is a lover of spreadsheets, statistics and printing "money".

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

To make clear the nonsense of their economic planning

Price things in gold not a currency that is elastic by law and has been stretched to failure. It snapped in 1929, it snapped in 1971 and it snapped in 2001. http://pricedingold.com/dow-jones-industrials/

The overall trendline runs upwards reflecting improvements in infrastructure and productivity. The gross distortions above and below the trendline are caused by an inflation-based monetary policy. The money supply has been increased on average 9% per year since 1913.

The plan is to see if they can stretch to snapping again. Those holding the currency will feel the sting.

Free includes debt-free!

The link you gave did not connect.

I would appreciate seeing the website since i agree with what you have said.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

Site was slow this morning. Down now.

Another link: http://home.earthlink.net/~intelligentbear/com-dow-au.htm

Free includes debt-free!


Gold is always the final arbiter in my view. It still is. I mean it is still used in the system for that purpose. This may be coming to an end. When gold disappears we will be in a fog with no light to guide us.

Paper gold has been used to suppress the gold markets for years but at some point, it may be soon, physical gold will not be available at any price. This is when the paper gold markets collapse and soon after the fiat currencies.

One sign for this is the narrowing basis between the spot and the futures which will eventually result in backwardation. When this becomes a relatively permanent condition it is game over. The same is true of silver and we are there at the moment.

Here is a quote from a recent article at Goldmoney:

"A new wave of stimulus seems certain to undermine confidence in the dollar, and now also the euro. And as Germans wake up to the possibility of their third currency wipe-out in a century, there is only one escape route for them: the accumulation of gold."

Good luck with that.

What they do not realise is that by trying to induce inflation by lowering the price of money they are causing the destruction of capital. That is why the 1930's Depression never ended until after WWII. War is the ultimate solution for a depression which is why they are pushing for it now. It is their last chance. It justifies rationing and draconian austerity, gargantuan profits for the profiteers, black markets, abandonment of morals and an eat drink and be merry for tomorrow we die mentality. This is balanced by an appalling degree of propaganda to cover up the destruction of everything that used to be called living.

From an economic point of view war is an absolute disaster for most of the people and many will be wiped out. For those who know it is coming and who are geared up to profit from it it is a long day in the sun. The next war if it comes will be used to cover up the collapse of the currencies and to introduce as a war measure some kind of new monetary system. What that will look like I have no idea.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

Paper money is the tool central banks use to gather gold,

and other commodities.

If people refuse to take their paper, central banks will be forced to spend their gold.

What is the unit of account between Central Banks. I wonder if it is gold. Knowing what their paper represents, why would Central Banks settle for less?

I am not surprised to read that Gold and Silver causes retardation in fiat money.

Free includes debt-free!

I know it's

not just me that see's absofuknlutely no dif between Romney and Obama other than race and hair styles. I mean come on...

Look if I take my Mtg money to the poker tables and lose it all because I was being a donkey, then I should walk away and cut my losses right.... Obama will take the car note and the Electric bill and lose that too, then ask someone if he can hold some money till next payday and lose that at the tables too. Mittens is exactly the same. Mere illusion the media and powers that be have created.

Less is more... More is less.... We are in a depression now. cut out NAFTA GATT and CAFTA and Audit the friggin fed already and bring back GSA... Do it sooner than later because Red China is already rising up....