Mitt Romney: Federal Reserve Should Avoid Stimulus

The Republican presidential hopeful says he doesn’t think another round of stimulus would help the economy, arguing that previous measures didn’t work.

via Mitt Romney: Federal Reserve Should Avoid Stimulus.

The first rounds of stimulus were a “Cheap Trick”, which is a strategy instead of a process. Like all strategy it is flawed, but for Romney to say it didn’t work is a lie.

And Romney knows strategy, so it was a deliberate lie.

Romney knows strategy. Otherwise he would never have been able to pull the Olympics off in Utah.

He used one strategy in Utah (throw money at it and it will somehow work itself out), and that strategy was flawed, but it worked.

The stimulus used a similar strategy (get money into people’s hands and they will know what to do with it), and like Romney’s strategy in Utah  it was flawed, but it worked. Perhaps it didn’t work like it should have, because most Americans  would complain, even if they are hanged by a new rope. Perhaps that is a poor metaphor, when talking stimulus.

Unlike Romney’s strategy in Utah, the Fed’s strategy of the stimulus may or may not be over with. The Olympics in Utah are over, and the American taxpayers are still paying for it. As for the stimulus, it is not clear yet if it’s over, because there is a year lag in the process when reporting on the economy, and the American taxpayers are still paying for it.

If Romney wins, he had better hope the stimulus has worked, because he hasn’t given the country any hints as to what his strategy is, going forward, other than he is an anti-Obama. This strategy (anti-Bush) worked for Obama, but then there was a strategy in-place when Obama took over. Romney’s apparent strategy is that he wants to wipe the slate clean of strategy and start over.

As Romney is a strategist, I am sure he has some idea (strategy) as to where he wants to take us.

It is probably better for him to wait and tell us directions after he’s elected, than now. There is a good chance not many of us are going to buy into where he’s going, until he Acts.

Once he Acts as POTUS it is going to be too late to worry about strategy, because it will be all process, as our economy gets another work-out.

4 thoughts on “Mitt Romney: Federal Reserve Should Avoid Stimulus

  1. Romney is too stupid for words. He fails to understand that the U.S. has a three sector economy; government, private and foreign.

    When the gov deficit spends, the private and foreign sectors benefit. These three sectors can be in defict or surplus but all 3 can never be in deficit or surplus at the same time. Therefore, a deficit in one sector means a surplus/deficit in the other two.

    For simplicity let’s just use two sectors; government and private. When the government deficit spends it spends into the private sector. That deficit spending, equals, to the penny, savings/surpluses in the private sector. Romney surely had Acct 101 where he learned the identity, Deficits=Surpluses.

    Maybe if he had a savings/surplus clock to hang next to his deficit clock he’d get the message. Same absolute amnts one plus one minus.

    Deficit spending is not growing the government. Deficit spending is growing the private sector. When Romney taxes the middle and poor classes he’s taking money from them and that’s growing the government sector. That’s what taxation does in every instance, reduces the amount of spendable income in the private sector and increases the government’s surplus.

  2. Thanks potomacoracle for commenting. Romney is not they only one too stupid for words, as I suffer the same case. So I double appreciate your words. 3 things.

    When foreign buys into the government is that like taxation in the private, in which it increases the government surplus, or is that giving the private a surplus, because it is paying what private normally would give the government in taxes?

    If it is giving the private a surplus, by paying their taxes, and which the private are giving the foreign in the exchange of foreign goods, does foreign buying into the government actually take away from the government?

    In that case, and If the private takes away from taxation, as the Tea Party movement wants, isn’t the government getting hit twice, once by private and another by foreign?

  3. “When foreign buys into government” Do you mean when foreign governments sell us stuff and we pay them in dollars and they take those dollars to buy treasury securities. That’s my understanding of what you mean.

    Exporters are paid in dollars. They can either save them by purchasing treasuries, or put them in a checking account at the Fed. In any event the actual dollars that Americans use to pay foreign exporters go into a shredder. A sovereign currency issuer doesn’t need revenue to spend. The foreign exporter has either a dollar credit or treasury securities.

    There is no taxing substitution in these transactions since tax revenue, per se, is not needed to fund expenditures in a fiat currency monetary system.

    I think your mixing your knowledge of standard fixed exchange rate accounting and fiat currency reserve accounting under flexible exchange rate regimes.

    Pls, visit http://www.modernmoney.wordpress.com to get an excellent primer on modern monetary theory.

  4. Thanks again for your reply. As for your first question, yes that is pretty much what I meant. As you say further into your comment, I am probably mixing up both systems. On the other hand, I am looking more strategic than at the process itself.

    I read some of the article from your link, but it looks like it’s going to take me awhile to get very deep into it. I have taken one class in Engineering Economics, so it hasn’t really prepared me for much of the discussion of your article you’ve linked.

    The thing about strategy is that you can look at both ends (the end at the beginning and the end at the end) and can fill in the means and ways as one goes along.

    The end at the beginning starts with Chairman Mao starving 60million of his own people to enter into what you call the Modern Market Theory and ending with China asking the US Navy to stay home.

    So what I was really asking: when does the support for the Military/Industrial/Government Complex become greater, through the buying of treasury securities from China, if as you say, “tax revenue, per se, is not needed to fund expenditures in a flat currency monetary system”?

    I mean strategically, it looks like the key is to get the U.S. tax payers to stop funding these expenditures, and it seems to be working, as the talk of IMF funds being injected into the U.S. sovereignty for the creations of jobs.

    The key being “expenditures” instead of “tax revenue”. Stop funding expenditures and the system collapses–high or low taxes and the system keeps chugging along, for better or worst.

    The “expenditure” guys seem to be winning.

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