Posts Tagged ‘Milton Friedman’
February 21st, 2012 at 7:49 pm
Mitt Romney, Crypto-Keynesian
Posted by Print

Mitt Romney has at least one thing in common with every other member of the Republican presidential field: his worst enemy is Mitt Romney.

At a speech in Shelby Township, Michigan earlier today Romney’s answer to a question about the Simpson-Bowles fiscal commision ended up in this intellectual cul-de-sac:

If you just cut, if all you’re thinking about doing is cutting spending, as you cut spending you’ll slow down the economy. So you have to, at the same time, create pro-growth tax policies.

Romney, of course, is correct about the broader question of tax policy, but his understanding of public spending makes him sound like a logical candidate to succeed Timothy Geithner as President Obama’s Secretary of the Treasury.

Federal spending doesn’t generate economic growth — all it does is repurpose money from the private sector. In some cases where government is performing essential functions, such as law enforcement or national defense, that’s a necessary sacrifice. In virtually all others — from green energy boondoggles to stimulus giveaways — it’s a net drain on the economy. And, as Milton Friedman would remind Romney, the rate of spending is the effective rate of taxation.

Over the past few weeks, a wide variety of conservative pundits have counseled Romney to more aggressively address his “authenticity” problem, showing the public a little more of his true personality. But as today’s little slip-up reveals, the only candidate less palatable to conservatives than the phony Romney is his authentic counterpart.