Romney budget plan 'a drag' on US growth: TD Bank
Planned cuts in non-defense spending to pay for investors' tax cuts will slow the US economy, writes bank's economist
Romney budget plan 'a drag' on US growth: TD Bank
Joseph N. DiStefano
Watching the US presidential campaign from Toronto, Craig Alexander, chief economist at TD Bank, one of the biggest banks doing business in Philadelphia and other East Coast cities, writes that "the gulf between the two parties is mainly over taxes. Democrats favor increasing taxes on the wealthy (or at least letting past tax-cuts expire) and Republicans do not...
"If Obama is re-elected, in all likelihood, [expect] higher taxes on dividends and capital gains. His deficit reduction plan calls for $1 in revenue increases for every $2.50 in spending restraint.
"If Romney is elected, taxes are more likely to fall. Romney’s plan calls for a reduction in marginal tax rates and the elimination of capital gains and dividends taxes on income below $200,000, to be paid for by eliminating deductions... "Romney’s platform calls for federal spending to fall from 24% of GDP to 20% of GDP by the end of his first term, while holding defense spending at 4% of GDP (thereby reversing the cuts that have been proposed by President Obama). "This will mean outright reductions in non-defense spending that will pose a drag on the pace of economic growth over the next four years... "There are areas of agreement... There is a broad acceptance of the principles for tax reform... that removes loopholes and deductions from the tax code, and uses some of this revenue to lower tax rates... "Working with Congress will be the biggest challenge facing the next American President. The task is large, but so too is the payoff. Achieving consensus on a prudent fiscal plan would go a long way to boost confidence, improving the prospects for economic growth."
Romney is bad for US economy. We all know it.
Hoover Harvard MBA
George Bush Harvard MBA
Romney Harvard MBA— Seed- Yea, and Obama has proven to be a real asset to this country the last 4 years. Laughable.— dogman5
- By fiscal and monetary stimulus, the current administration has directly produced job creation, month after month for the past 3 years plus. By contrast, in Europe, the IMF, the European Central Bank,ECB, have destroyed economic growth, destroyed jobs, cut back on social spending for health care, pensions, education and college. People are rioting in the streets on a weekly basis and economic recovery is so wounded that the disastrous policies of austerity are now being scaled back. You see, when you spend less money in the economy, and no one replaces the lost demand, the circulation of money into tax coffers and cash registers declines, causing the death spiral of cutting back in another round of austerity, leading to economic loss in production and growth and loss of jobs. The Democrats and all economists know that when one sector falls down and no longer allows for capital to circulate, that the government steps in to spend, until the the private sector recovers and resumes its proper function. Apparently, some people think following the self destructive example of European austerity is a good thing and stimulus spending that turned job losses into job creation is bad. Only in America, after seeing the practical consequences of a bad policy would a greedy political party seek to emulate it for political gain. Anything to discredit the first Black President of America for doing his job and doing it well. Too bad, the deep divisions of this society apparently will only go away one funeral at a time, for each of the last holdout racists cranks who think night is day and wrong is right, all for partisan pettiness.
- Must be more "librul" media garbage. The Ayn Plan is perfect for Amerika.— CiceroSpuriousDeodatusTheSecond
- TD Bank needs an economist with a better understanding of the DESTRUCTIVE role of government spending, not one beholden to Keynesian nonsense.— Phillip Schearer
m- 4 more years for the 47 percent.— SonnySpoon
- Let me ask a few questions:
How many of you have mortgages, kids, and take and will likely to take deductions for mortgage interest deduction, unreimbursed healthcare expense deduction, student loan interest deduction, child/dependent care deduction?
How many of you have "investment income" (interest, dividends, capital gains)?
Which one do you think is more important to middle class families?
If you don't think investment income is higher concern, then you will be paying more taxes or benefiting less when they remove all the deductions but instead do not tax investment income.— EIK - How does the content of this article, all these quotes, support the title about the Romney drag?— Marty Kurlich
- If elected, Romney will end the mortgage deduction. That won't hurt his uber-rich friends ... just the rest of us.— Copper34
- I was remiss earlier in asking how the content of this article supported the title about the Romney drag. I now see the quote “…reductions in non-defense spending that will pose a DRAG on the pace of economic growth over the next four years...”
So, we just completed our fourth summer of economic “recovery”, the most anemic recovery in U.S. history, we have a $16 trillion debt increasing at over $1 trillion/year, but the REAL danger is reductions in gov’t spending? If that’s the case, why did we play small ball with stimulus spending earlier. We should be borrowing and spending $100 trillion a year on stimulus and other gov’t programs. The economy will be saved, in fact, it may be 100x better than ever!
Copper34,
Romney will end the mortgage deduction? Not according to the Politifact website: “They made an assumption that I would reduce the home mortgage-interest deduction," Romney said in an interview with Fortune. "I will not do that for middle-income taxpayers." http://www.politifact.com/truth-o-meter/statements/2012/sep/24/barack-obama/obama-says-romney-could-take-away-middle-class-tax/
— Marty Kurlich - Marty, I'm glad you re-read the item. I still think you're casting too wide a net. He's not saying don't vote for Romney. He's not saying Obama is better. He is saying that cutting the federal budget will slow the economy, quickly.— Joe D
