No … I don’t think the world would come to an end. But there would be some changes. Some will have short-term influence, some long-term. Here are a few thoughts on what the ramifications might be, though most of them would be dependent on how Congress acts or reacts.
The only way that really major changes are going to happen would be if the Republicans get a filibuster-proof majority in the Senate. Not many folks think that this is going to happen any time soon, but anything’s possible. Senate Democrats would be put in a position of deciding whether or not to try to work with the House and the new President to shape some moderate proposals. The better guess is that they will vow to stonewall Romney every bit as effectively as the House Republicans have done to Obama. Screw the country. Nothing will get done, and each side will blame the other.
The one arena where Romney may make a key difference is with the Supreme Court. If one of the liberal justices dies or retires, and he puts up one more ultra-conservative, the Senate Democrats could well filibuster. Even if it is a moderate conservative, and the Democrats do go along with the nominee, that will make the court 6 – 3 in favor of the conservatives. (I had fooled myself into believing for the past decade or so that certain justices simply took a conservative perspective on the Constitution. More recently I’ve come to believe that they see the various cases as highly partisan Republicans and Democrats, not as jurists above the political fray … truly sad.)
Let’s just imagine for a moment that either the Republicans get a filibuster-proof Senate or there are a few cooperative Democratic Senators. How will Romney’s agenda play out if he gets his way on all items? How will various issues be effected? Let’s walk through them.
Spending cuts – There will likely be some cuts enacted, but probably no where near as radical as what some Republicans are wishing for. Every dollar spent effects someone’s district. Every rep or senator will work to protect some of that bacon. Whatever spending cuts go through, that will instantly shrink the GDP by that amount … and with it the economy. All recipients of federal dollars will have that much less money to spend. Depending on the size of the cuts, this may come as a set back from which it will be hard to dig our way out.
Tax Cuts – The Republicans are counting on the theory that taxes returned to the payers will offset the problems created by the spending cuts. The question is – what will these would-be taxpayers do with the money that they get back? The short answer is – whatever they want. Likely, a fair portion of it will be spent, thereby increasing the GDP. But some of it will get saved, invested, moved overseas or used to pay down debt; each having different influences on the economy. Will the overall economy do better? Will it create more jobs? I would argue that it will change things very little in the short term. It will mainly serve to transfer wealth away from the poor and middle class toward the investors. This will simply continue a trend that has been going on for the past 30 years …perhaps speeding up this stratification of wealth.
Deregulation – This may well provide a grand tradeoff. With regulations controlling carbon and other pollutants relaxed, there will likely be some number of efficiencies gained within the economy, and jobs created. Business will enjoy a friendlier regulatory climate, which could give them some boost. Sadly, one of the tricks that Republicans have been using is, rather than doing away with antiquated regulations, they simply cut the budgets of the regulating agencies. That way industry just gets away with whatever they wish to avoid because there will be no one around to enforce anything. Republicans claim that it will be a big boost, but I don’t see it being huge … I haven’t heard a compelling argument either way. But the tradeoffs – we will have to tolerate greater levels of pollution, further health and worker safety risks and further delays making any progress on dealing with the climate change issue, not to mention the crazy risks inherent to the financial markets. It was a hand full of very powerful people in banking and finance who were instrumental in the boom and bust of the real estate bubble that we are still dealing with. We know for a fact that their time horizons are very short indeed. Where will the next unregulated boom and bust come from? … hmmm.
The National Deficit and Debt – Historically, the Republicans have always been much bolder to make tax cuts than spending cuts. If you really look hard at the record, federal spending has grown dramatically during the Reagan and Bush II years, largely due to defense build ups, Iraq and Afghan wars and Medicare Parts C and D. Now the Tea Party types are talking a good game, but in the end, I doubt that they really have that much political courage. They would simply be stepping on too many feet. Even Paul Ryan’s proposal only narrows the projected deficit by $2 trillion over the next ten years. He has been keeping many of the fine details of his cuts murky, so as to not raise too big a fuss, and Romney worse yet. My guess is that they will make a step in the direction of cuts, but it won’t be big enough to make much long-term difference. In turn, any further tax cutting will keep the overall debt problem from being resolved.
Social Security – It will only take minor changes to make SS viable for the long term. Hopefully, reasonable people on both sides of the isle can make this work. It’s about time.
Medicare – A whole lot of smoke has been created over the past few weeks related to Medicare … most of it false on both sides. Medicare IS a huge spending problem, but neither side has the guts to go after the real problems – the expansion of health care costs. Both sides just want to deal with the insurance end of things. There aren’t so many savings to be gained at that point, but it is politically safer. Ryan’s plan may work better if costs stay under control, but that is a huge ‘what if’.
As for foreign policy, but there might be some unforeseeable surprises. My hope is that Pres. Romney would surround himself with good enough advisors that he could avoid the big mistakes. His hard line support of Israel could create a serious backlash in the Islamic world. He says he wants to be more involved in Syria. It was that kind of thing that laid the foundations for 9/11. I would hate to see more of that. I have to say that his responses to the killings in Libya have made him look awfully petty.
In education, it’s hard to say. He may push to get the federal government out of the education business. But he may also push the education reform movement. This could be a good thing if he works with the teachers unions to take steps in the right direction. But he could instead take the Gov. Scott Walker approach, and try to cut the unions off at the knees. That would create one more highly polarizing mess. Wisconsin, here we come.
Research and development doesn’t make up a huge share of the federal budget, but it has a vastly greater long-term impact on the economy than most people realize. If the Republicans go after the budget very aggressively and cut in to this, it would be a very bad thing.
If Gov. Romney gets elected the sky will not fall in. In the short-term, the worst case scenario would be that serious austerity measures could easily push us back into recession, but some of his counter measures could soften that … very hard to say. My most serious concern has to do with a really massive transfer of wealth and relative income from the middle income levels to the upper crust that has been taking place over the course of the past 30+ years. This slowed during the ‘90s with big productivity gains in an expanding economy, but since then we’ve seen big productivity gains in a stagnant economy. The jobs have just evaporated, never to come back. New types of jobs have been replacing them, but usually with lower pay and poor benefits. How is Romney going to reverse this? … by cutting taxes? Give me a break. Hence, the grand transfer of wealth will simply accelerate. I don’t see a good ending to that story.
Just a thought … DonC